The federal cabinet on Monday approved the imposition of a regulatory duty of up to 100% on nearly 800 tariff lines for a period of six months, which will have very little impact on the import bill, as the duties will amount to just 1.5% of last year’s import payments. .
The government has targeted cellphones, new and used cars, household appliances, meat, fish, fruits, vegetables, shoes, furniture and musical instruments by levying the regulatory duty.
Additional customs duties of up to 28% were also imposed on cars. Their importation is now authorized subject to the payment of higher taxes.
A federal cabinet summary showed the government has imposed duty at a level even below the limits allowed under international treaties, indicating divisions within its camps. Prime Minister Shehbaz Sharif wanted to impose a 1000% regulatory duty while Finance Minister Miftah Ismail announced a levy of up to 600% additional regulatory duty.
The federal cabinet decision, which was obtained through the release of the summary, showed that the duty was in fact imposed in a range of 10% to 100%, covering only $ 1.2 billion in imports from the United States. Previous exercice.
The cabinet approved the imposition of statutory duties and the increase of additional customs duties for only six months, except that the duties on electric cars would only be applicable for three months.
The cabinet also agreed that consignments of vehicles, mobile phones and household appliances held up until August 18 should be released upon payment of a 100% fine.
A day earlier, the Tariff Policy Council had approved the imposition of the duties, which was chaired by Trade Minister Syed Naveed Qamar.
The duties were imposed to restrict imports, which hit a record $80 billion in the previous fiscal year. Over the weekend, the government lifted the ban on imports after failing to sustain pressure from the European Union and the International Monetary Fund (IMF).
Duties were imposed on 792 tariff lines, covering only $1.2 billion of the import bill. The Department of Commerce has estimated that the duties could reduce imports by 60-70%, which would translate to just $720-840 million.
Raw materials and industrial inputs will remain exempt from these duties.
Miftah Ismail has told the media that he will impose up to 600% duties and taxes on cars, making it impossible to import vehicles.
At the meeting of the Tariff Policy Council, which recommended these rates, the Chairman of the Council, Syed Naveed Qamar, expressed concern over the proposed dramatic increase in import duties on meat and other products. due to possible retaliation from the United States and other trading partners.
The National Tariff Commission has expressed concern over the negligible impact of the proposed duties on the import bill, which could explode further this year after the ban was lifted and only 1.5% of total imports were targeted l ‘last year.
The government has targeted 49 vehicle tariff lines with an import value of only $315 million. It imposed 10% to 100% statutory duties and 7% to 28% additional customs duties on cars, details showed.
Up to 1,000cc of new and old cars that were previously exempt from the regulatory duty have been targeted with a 100% duty, bringing total import taxes to 150%.
Vehicles that were previously subject to 77% import taxes will now have to pay a total of 169% in taxes, as the government has imposed 85% additional regulatory duties and 7% additional customs duties.
The most expensive cars, whether sporty or high-engine, were not heavily taxed.
These categories of vehicles were previously subject to 197% of total duties at the import stage. Now the government has imposed 28% additional customs duties and only 10% additional statutory duties.
Published in The Express Tribune, August 23rd2022.
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