ISLAMABAD – PTI government hints at major policy shift for Imports inPakistan.
Pakistan Thereek i Insaaf (PTI) government is almost certain to reduceRegulatory Duties (RDs) and Additional Customs Duties (ACDs) on severalimport items.
After their initial crusade against imports, the government will introducethe changes in policy in an upcoming mini-budget, after assessing that anyadditional taxes will have far-reaching ‘disastrous effects’ on the economy.
Meanwhile, the media has been told that according to the FBR, any otheradditional taxes would have disastrous effects and would probably causemore loss than gains. If the petroleum products’ GST rate is proposed to behiked, its consumption is already down by 20 percent.
The tobacco rate increase will also be counter-productive because itsvolume has so far shown a decreasing trend this fiscal year.
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With RDs and ACDs imposed on hundreds of items at different rates, theimport compression has has reached levels around $5-6 billion. Thesubsequent losses have led the government to their current step of easingout imports by rationalizing import tariffs in shape of reducing RDs andACDs.
The only two viable options in this situation with the import compressionat the current level is either to open up to imports, or the make sure thatenforcement is effective. While the CNIC requirement for purchases above Rs50,000 came into force on February 1, it was under consideration to presenta list of items to the visiting mission of the IMF.
The two sides of the table will then decide the number of items where theRDs could be reduced through a review of the upcoming budget.
