Sustaining Trade and the Balance of Payments Chart 15.1: Export Incentives and Institutions in Different Countries India Pakistan Bangladesh Duty Drawbacks Yes Yes Yes Concessionary Export Finance Yes No Yes Exports Insurance& Guarantees Yes No Yes Export Quality Management Yes No No Export Processing Zones Yes Yes Yes Export Performance Requirement Yes No Yes Lower Income Tax Yes Yes Yes Export Promotion Agency Yes Yes Yes Export Cash Incentive Yes No Yes Sources: Diverse Thailand Yes Yes Yes Yes Yes Yes Yes Yes Yes Clearly, Pakistan needs to greatly strengthen its export related institutions like the Trade Development Authority of Pakistan(TDAP) and The Pakistan Standard and Quality Control Authority(PSQCA). The appropriate decision has been taken recently to levy a subsidized tariff on electricity at Rs 19.99 per kwh on export sectors. There is need also to explore the zero-rating of the domestic sales tax in export industries as was the case prior to 2019-20. Further, a cash incentive may be offered on emerging and value-added exports of 5 to 8 percent. Very importantly, the exchange rate should not be overvalued, and the REER should remain close to 95. 15.3 Over-Liberalization of Imports As highlighted above, there has been a rapid and deep process of liberalization of imports from the mid-90s onwards. This has sometimes been undertaken under the pressure of the IMF in an on-going program. Table 15.7 shows that in the early to mid-90s, the import tariff wall was high. There were ten slabs, and the maximum tariff was as high as 120 percent. The average tariff on imports was above 22 percent. Following six to seven moves to rationalize the tariff structure, the maximum tariff is now down to only 20 percent. There are three other slabs of 3 percent, 11 percent and 16 percent respectively. Some items have also been subjected to regulatory duties under different SROs. The average tariff on imports has now come down to only 7 percent from 22 percent two decades ago. 147