Who Owns Pakistan - Yimg

oil". It is not difficult from the ambiguity and enormity of the provision to guess, for
the benefit of which engineering industries this policy decision has been taken.
Duty drawbacks and rebates are refunds of the duties and taxes paid by the
manufacturers on duty-paid imported raw material used in the value added
exports. When the scheme was introduced in the late 1980, it was limited to
refunds of import duty, sales tax and presumptive income tax but with a
proliferation of taxes, its coverage has been expanded to include all the taxes
and incidences paid by exporters including exporters including the municipality
taxes. The Collector of Customs, Collector of Sales tax, Income tax directorate,
Sea Due Department make refund of billion of rupees every year which are not
reflected in the gross revenue receipts.
Rebates are permissible at different rates for different items, under such a
complex system that a small favour by the taxation officials can mean a
difference of millions of rupees. Two of Pakistan's notorious business groups, the
Tawakkal and Schon grew around the export houses known to be claiming
rebates based on fake exports, made through letters of credit opened with banks
that existed only on papers in South Africa and Cyprus.
The CBR officials told the National Assembly Standing Committee on Finance
and Economic Affairs in January 1998 that one of the main reasons for a shortfall
in the revenue projections for the fiscal year 1997-98 was the proliferation of
SROs that were issued by the CBR for the benefit of individuals and groups. A
number of these SRO's have been issued for the benefit of individual industrial
units by name, entitling them to rebates with retrospective effect. For example, a
notification issued by CBR in July 1997 mentioned Nayyar Industries (Pvt) Ltd,
Gujrat and Lahore, owned by relatives of Interior Minister Chaudry Shujaat
Hussain to be entitled to refund with retrospective effect, at the rate of 16.9% and
9.4% of FOB prices, respectively, for custom duties and sales tax.
In 1986 when Pakistan was facing acute shortage of sugar, Dr Mahboob ul Haq
announced rebates in payment of excise duty to sugar manufacturers, under
which sugar mills were entitled to claim rebate of 50% of excise duty on sugar
produced in excess of average of last three years. The decision was meant to
encourage domestic production and discourage imports but payment of rebate
has continued even during years of surplus production.
Nawaz Sharif's House of Ittefaq was a major beneficiary of the decision to pay
rebate on sugar in 1986 and PPP leaders claimed at the press conferences that
Ittefaq group benefitted to the tune of Rs 500 million, by the decision. Again in
1997 when Nawaz Sharif came into power, one of the several moves by Ittefaq
group was seeking payment of arrears of rebates which were allegedly not paid
by Benazir Govt.
107