As the federal government prepares to lift a ban on the import of “non-essential luxury items”, it has planned what could be termed as a mini-budget, and consequently imported phones, vehicles, and home appliances will become expensive in the country, SAMAA TV’s Shakeel Ahmed reported.
The finance ministry is also planning to increase the tax rates on tobacco and cigarettes to cover for the lost revenue from the fixed tax on retailers.
Federal Finance Minister Miftah Ismail, at a press conference on Thursday, confirmed that the government was going to lift the ban on the import of luxury items to meet IMF demands, though Prime Minister Shehbaz Sharif was not happy about the decision.
While Miftah only named the IMF, sources told Shakeel Ahmed that the European Union and the World Trade Organization (WTO) are also urging Pakistan to scrap the ban, which they view in violation of international laws.
Under the international trade law, countries cannot impose a ban on the import of foreign goods except in certain cases.
In May, the PMLN government banned the import of hundreds of luxury items to check the outflow of foreign currency from the country.
Now, as the ban is being lifted, the government plans to increase regulatory duty on these items to curb their imports and to control the foreign currency outflows.
The finance minister told the press conference that new rates of regulatory duty will be announced through an ordinance.
The government measure will make imported vehicles, mobile phones, home appliances, clothes, shoes, purses, and imported food more expensive, says Shakeel Ahmed.
Tax on cigarettes
The finance ministry has suspended the collection of fixed-tax on small retailers for at least three months. This has reduced planned tax collection from the retail sector to Rs42 billion from Rs27 billion.
Finance Minister Miftah told the press conference that the government will increase tax on tobacco and cigarettes to raise Rs36 billion and an ordinance will be issued in this regard.
Saudi investment in telecom sector
A Saudi company is investing in Pakistan’s telecom sector and will install between 70 and 80 towers in the country, the finance minister said.
He said South Africa will also invest in Pakistan while the question about Qatar’s investment should be left for Doha to answer.
Saudi and Qatar will finance a total of $4 billion loans for Pakistan, Miftah said.