Pakistan seeks Rs40b in new taxes

Islamabad - Additional revenue measures have been taken to make up for a shortfall of Rs39.8 billion in the revenue target.

The government of Pakistan has introduced a mini budget, envisaging additional tax measures of over Rs40 billion by imposing 5-10 per cent regulatory duty on the import of 61 items; increasing duty by five per cent on another 289 items; and levying one per cent additional customs duty on thousands of other items.
The decision was announced by Finance Minister Ishaq Dar at a news conference on Monday after presiding over a meeting of the Economic Coordination Committee of the cabinet to comply with a pre-condition of the IMF on the last day of its deadline.
"Additional revenue measures have been taken to make up for a shortfall of Rs39.8 billion in the revenue target for the first quarter of the current financial year," he said. The committee also imposed 30 per cent regulatory duty on the import of maize, and kept unchanged the support price for wheat at Rs1,300 per 40kg.
He said that the ECC extended the applicability of 0.3 per cent withholding tax (instead of the 0.6 per cent imposed in the current year's budget) on banking transactions and filing of income tax returns to December 31. The meeting did not take up a proposed $16 billion contract for the import of liquefied natural gas from Qatar.
Dar said that additional measures would generate Rs4.5 billion through the imposition of 5-10 per cent regulatory duty on 61 items which had no such duty. He said the Federal Board of Revenue had identified around 1,400 non-essential imported luxury items that had eaten away almost half of around $3 billion savings in the shape of lower oil import bill, but being a member of the World Trade Organisation it was not possible for Pakistan to ban them.
Dar said another Rs4.5 billion would be generated by increasing by five per cent the duty on the import of 289 items. The government would also get Rs21 billion through one per cent additional duty on all items in the fifth schedule of the Customs Act currently being charged at up to 20 per cent customs duty. Nine categories having an impact on the common man would remain exempt from the one per cent additional duty. The list includes all non-dutiable imports, agriculture machinery, essential raw materials and inputs for textile, agriculture, pharmaceutical and aviation sectors, socially sensitive items like vegetables and priority industrial items of coal mining and renewable energy.
Other exempted areas from the one per cent fresh import duty include import of fertilisers, seeds, plant and machinery for the manufacturing of goods, the telecom sector and raw materials of 25 sectors like the artificial leather industry, pesticides, sugar mills, etc. Another Rs6.5 billion would come out of increased Federal Excise Duty on locally produced cigarettes and Rs2.5 billion through a 10 per cent increase in duty on the import of second-hand vehicles above 1000cc capacity.
The import duty on 800cc and 1000cc used vehicles would remain unchanged at $4,800 and $6,000 per car. The duty on 1000-1300cc vehicles was hiked by 10 per cent to $13,200. The duty on all bigger capacity vehicles was increased by 10 per cent to $18,500 on 1300-1500cc, to $22,500 on 1501-1600cc, and $27,900 on 1601-1800cc. Luxury vehicles would attract 10 per cent additional duty.
- business@khaleejtimes.com
Some of the 61 items that have attracted fresh duties of 5-10 per cent are: live poultry, frozen fish including fillets and fish meat, coconuts, brazil nuts and cashew nuts, almonds, preserved meat including offal or blood, cocoa paste and cocoa butter, ground nuts, pineapples, citrus fruit, pears, apricots, cherries, peaches, strawberries, tea and coffee essences and concentrates, trunk and suit cases-brief cases apparel and clothing accessories of leather, men's, women's and boy's overcoats, jackets, baby garments and clothing accessories, garments like track suits and swimwear, handkerchiefs, ties, shawls, scarves, mufflers, curtains and interior blinds, tarpaulins and tents, footwear and their parts, imitation jewellery, watches, diapers and sanitary towels.
Some of the 289 items on which regulatory duty was increased from 10-15 per cent are: yogurt, butter, dairy spreads and others, cheese, curd, grated or powdered cheese of all kinds, natural honey, pineapples, avocados, guavas, mangoes, frozen mango, mango pulp, oranges, grapefruit, dried litmus products, watermelons, apples, pears, quinces, apricots, sour cherries, peaches, plums and sloes, strawberries, raspberries, blackberries, mulberries and loganberries, black, white or red currants and gooseberries.
- business@khaleejtimes.com

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