Govt tightens EFS on misuse

The government on Monday tightened conditions for availing the export facilitation scheme (EFS) after manufacturers massively misused a facility intended to boost exports. The Economic Coordination Committee (ECC) of the Cabinet approved major amendments to the 2021 Export Facilitation Scheme, aiming to limit its misuse and prevent tax evasion through raw material imports. A key issue was manufacturers avoiding the newly introduced 18% sales tax by importing raw materials instead of purchasing them locally. Finance Minister Muhammad Aurangzeb chaired the ECC meeting, which also approved nearly Rs3 billion in additional funds for procuring arms, ammunition, and land for anti-smuggling check posts. In a press release, the finance ministry stated that the ECC had approved a summary submitted by the Revenue Division to introduce necessary policy interventions in the Export Facilitation Scheme (EFS) 2021. The objective was to plug revenue leakages without disturbing compliant exporters.