Thursday Aug 18, 2022
ISLAMABAD: Finance Minister Miftah Ismail Thursday announced scrapping the import ban — three months after the restriction was imposed — as the country's economy sees a breather after positive cues.
The finance minister, in a press conference alongside members of the economic team, said that the import ban on non-luxury items was being lifted in line with the International Monetary Fund's (IMF) demands.
Miftah said that after the import ban, it became easier for the government to import necessary commodities, which were essential for the masses.
"When we have limited dollars and we have to feed a huge population, our priority automatically becomes [the nation]. We had to choose between importing cars and wheat — that's why we imposed a ban [on non-essential items]."
The finance minister said the government was scrapping the import ban as it was an international requirement, but noted that the regulatory duty that will be imposed on the non-essential imported items will be three times higher than the current levels.
"...we will impose such heavy duties that these items cannot be imported [easily] or at least in their finished form. I don't have enough dollars, so I will prioritise cotton, edible oil, and wheat. I do not prioritise Iphones or cars."
The heavy duties will be imposed on completely built-up (CBU) commodities — cars, mobile phones, and electronic appliances — and apart from them, the imported fish, meat, purse, and other such non-luxury items.
"Even then, if a person wants to import a car that is originally worth Rs60 million [but after the regulatory duties] it will cost them Rs300-400 million, they can import it."
Miftah said that the government's objective was not just to allow imports, but it was to fulfil international and IMF demands, while also keeping the current account deficit in check.
Speaking about the retail tax, the finance minister said he had taken back the tax as there were some errors. "Even small shop owners were brought under the ambit, which was wrong."
He added that although the fixed tax will be lifted, the variable taxes — 5% sales tax and 7.5% income tax — will still be imposed on every shopkeeper for the next three months.
He said that after three months, from October 1, the sales and income taxes will be imposed based on the shopkeepers' electricity bills.
Miftah said that the tax on cigarettes and tobacco will be double, which is an additional Rs36 billion.
Miftah said that after much back-and-forth, the IMF has finally announced that its board meeting will take place on August 29 — for considering Pakistan's request for the release of the $1.17 billion tranche.
The finance minister noted that the government has also fulfilled all the pre-requisites of the lender, while the funding gap of $4 billion has also been met — after friendly countries agreed to help Pakistan financially.
The finance minister said that in the month of August, Pakistan's stock exchange and currency were among the best performers globally — showing that the government's plans are working.