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Tuesday, May 21, 2024

Govt removes ban on imports but with conditions

The government maintained the ban for three months, but some items are still found in the local market. 

In a press conference today, Federal Minister for Finance and Revenue Miftah Ismail announced that the government has decide to lift the ban on imports of all goods. Previously, import restriction was being imposed to curb the trade deficit and outflow of dollars so that the value of rupee can be retained.

While addressing the conference, Mr. Miftah said “as it is a requirement of the international community, we will remove ban on imports.”

He explained that the government would levy such regulatory duties (RD) that these goods would not enter Pakistan as finished goods. He said, “we would impose the utmost permissible regulatory duty.”

Read more: New tax will cause unemployment!

He added, “regulatory duty could be in the range of 400-600 percent or even higher for some sectors, as the country lacks dollars, and the government would prioritize the purchase of wheat, edible oil, cotton over smartphones and cars.”

Miftah Ismail stated that hefty duties would be levied on the import of CBUs (Completely Built-Up Units), which include automobiles, mobile phones, and other luxury items such as shoes, meat and purses. This would allow imports to be maintained.

He clarified, “our aim is not to allow the import of non-essential items. Our goal is to conform with the agreements made with the International Monetary Fund (IMF) and other international organizations, including the World Trade Organization, while keeping the import numbers in check.”

Moreover, the government maintained the ban for three months, but some items are still found in the local market.

He stated that in this manner, things can be allowed to enter via green channel while increasing government’s revenue.

Coming towards the issues pertaining to electricity rates, he denied any non-funded subsides, so that the primary surplus target of Rs153 billion can be met.

Finance minister added that the government has revised its taxation target from the retail sector, taking it to Rs27 billion as compared to the previous target of Rs42 billion.

“We would introduce an ordinance, under which the fixed tax on the retail sector would be abolished, but a variable tax including a 5 percent sales tax and 7.5 percent income tax would continue for the coming three months on all retailers,” he said.

He specified that this would remain for retailers consuming 0-50 units and would increase slab-wise.

“This would be implemented from October 1,” he announced.

According to Punjab Board of Investment and Trade, Retail sector is the third largest sector in Pakistan. It is the second largest employer, employing around 16 percent of the labor force. Excessive taxation on retailers may cause unemployment.