Key details of budget negotiations between Pakistan and the International Monetary Fund have emerged, indicating that several imported goods may become cheaper in the next fiscal year’s budget.
According to media reports, the government is considering reductions in regulatory duties and additional customs duties and import tariffs on a range of products in the upcoming budget.
The regulatory duties and additional customs duties on imported goods are likely to be lowered, while import duties on foreign vehicles may also be reduced.
Tariffs on raw materials used by the export industry are expected to be cut and taxes on machinery and equipment required for 5G technology in the telecommunications sector may also be reduced. As a result, hundreds of raw materials used by export oriented industries could become cheaper.
On the instructions of Prime Minister Shehbaz Sharif, the Ministry of Industries and Commerce has prepared a draft National Tariff Policy. Under IMF related reform targets, tariffs are expected to be gradually reduced to improve the competitiveness of local industries.
Media reports said that additional customs duties may be reduced on 3,149 tariff lines of imported goods, while regulatory duties could also be lowered on more than 1,900 tariff lines.
The budget is also expected to provide relief on imported agricultural raw materials. Import duties on agricultural machinery, equipment and spare parts that are not manufactured locally may be reduced.
In addition, the government is likely to abolish the remaining 2 per cent additional customs duty on 518 tariff lines currently falling under the 15 per cent customs duty slab.
According to reports, the additional customs duty on 2,166 tariff lines under the 20 per cent customs duty slab may be reduced from 4 per cent to 2 per cent. Similarly, for 468 tariff lines subject to customs duties above 20 per cent, the additional customs duty could be cut from 6 per cent to 4 per cent.
The upcoming budget may also include reductions in additional customs duties on machinery and equipment imported for establishing electric vehicle and electric motorcycle manufacturing plants in Pakistan.
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