Senate Committee to Study Case for Joining Global IT Agreement

A committee has been created by the Prime Minister’s Secretariat to decide the recommendations for Pakistan’s compliance to World Trade Organisation’s Information Technology Agreement (ITA). The contract intends to exclude tariffs on over 400 IT products, counting desktops, laptops and mobile phones.

The five-member committee, led by the commerce secretary, will give its report to the secretariat in two weeks. Other four members included secretary income division, secretary IT, secretary Ministry of Industries and Production and previous ambassador to WTO Dr Manzoor Ahmad. The terms of references (ToR) of the committee have also been decided.

Senate Committee to Study Case for Joining Global IT Agreement

Also Read: WTO ITA Agreement: Pakistan to Abolish or Reduce IT Import Duties and Taxes

There are deviating ideas whether the country should sanction this agreement or not.

“Pakistan should look very carefully at the possibility of joining the agreement.”

Said WTO Director-General Roberto Azevedo while in an interview with Dawn, during his visit to Pakistan in May this year.

Every trade contract has to meet the planned objective of the country he further added.

On the other hand, he explained that even if Pakistan did not endorse the IT agreement, it would still profit from zero percent duty in the market of countries. That agreed to the contract as zero charges will apply to all 162 member countries of the WTO.

After this explanation from the WTO chief, the commerce ministry’s move to back the agreement was probed amongst doubts that joining the treaty would lead to revenue losses to the national exchequer costing billions of rupees.

An income loss of Rs.4.5 billion has been estimated by the FBR alone in customs duties after concurrence to the treaty in the first year.

There are almost 174 tariff lines which insure ICT products. The cessation of these tariff lines shows that 1pc customs duty is indictable on 38 tariff lines, 5pc on 86 tariff lines. And 10pc on 17 tariff lines, 15pc on 3 tariff lines, 20pc on 20 tariff lines, 25pc on 9 tariff lines and Rs.250 on mobile phones.

In terms of assessment, the maximum import value is of mobile phones, followed by 86 tariff lines, 20 tariff lines and 38 tariff lines.

Becoming guarantor to the ITA would not certainly open doors for Pakistani exports. That have to face profound items lists of many countries, requiring spreading period of ITA application.

In spite of all these concerns, the committee will study ITA in the perspective of wider allegation for e-commerce, effect of the treaty-led liberalization, and drop of customs duties on the software growth sector.

The committee will also examine prospects presented by ITA for assimilation of global source chain of IT products and services. And appraisal revenue inevitable in case of compliance, calculated on the base of customs duties poised on 418 items during the past five years.

Source: Dawn