Arsalan Ali

The government of Pakistan needs to facilitate exporters by reducing customs duties and taxes on the import of upholstery and accessories to increase the export of furniture from the country and strengthen the national economy, WealthPK reports. In order to facilitate exporters and manufacturers of furniture, the government will have to implement Duty and Tax Remission for Export (DTRE). The latest report released by the Trade Development Authority of Pakistan shows that abolishing duties and tariffs on machinery and equipment imported by the furniture industry will reduce production costs and increase profitability.

The report highlights the importance of bringing furniture machinery under the fifth schedule of the Customs Act of 1969 so that all duties are eliminated and new investment in the sector is encouraged. It says that abolishing duties and taxes on upholstery, including locks, handles, sliders and hinges, will facilitate exporters and give a boost to the industry. It adds that the government should implement the Export Facilitation Scheme 2021 and DTRE for manufacturers and exporters to reduce taxes and duties on upholstery and other accessories needed by the furniture industry.

The report says that a 20% customs duty has been imposed on the import of locks, handles and sliders besides an additional duty of 6%. A regulatory duty of 5% has also been imposed on the import of locks from other countries. The industrialists have to pay a 17% sales tax and an 11% advance income tax on each imported item. The data of the Pakistan Bureau of Statistics shows that the export of furniture during the first four months of the current fiscal was recorded at $5.386 million, showing a growth of 93.61% as compared to $2.782 million in the corresponding period of the previous financial year.

The export of furniture stood at $1.411 million in October 2022 as compared to $0.755 million during the same month of last year, showing a growth of 98% on a year-on-year basis. Major export destinations of Pakistani furniture include the United States, Qatar, United Arab Emirates, the UK and Canada. The report states that investment in the furniture industry can be facilitated through export processing zones (EPZs).

In addition to attracting highly skilled labour, EPZs will help investors to get raw materials for furniture and improve the quality of products. The EPZs will also ensure easy availability of materials and accessories. It says that manufacturers should be trained about the ways to increase the export of furniture besides educating them on government regulations. Through its training programmes, the Technical Education and Vocational Training Authority can help the manufacturing industry to get orders from abroad for modern furniture by employing a skilled labour force.

The report states that dealing with the export of furniture in an unprofessional manner at the port, transportation costs and wood prices are major issues faced by exporters. It adds that exporters should be encouraged to participate in international exhibitions. Additionally, an online platform should be established for the furniture industry to reach foreign buyers. “In 2021, the value of the global furniture market was $527.89 billion. By 2027, the market value is predicted to rise to approximately $650.7 billion,” says the report available with WealthPK.

Credit : Independent News Pakistan-WealthPk