KARACHI: The government is likely to impose one per cent customs duty on raw materials that are being imported at zero duty in the budget 2015-16.

Sources in the industrial sector said that the government officials had continuously been hinting at imposition of 1pc duty in various pre-budget meetings held with the stakeholders.

“Imposition of duty on zero-rated raw materials will generate huge revenue for the government as substantial number of critical industrial materials are being imported at zero duty,” the sources said.

The zero duty was in line with the national policy of import substitution to promote industrialisation.

Under immense pressure from the international lending agencies to generate revenue the government seems to be moving away from the national long-term policy objectives.

The move is indicated to provide short-term hike in revenue generation, but in the longer run imports are sure to increase as local manufacturing will become expensive vis-à-vis imports.

At that stage the country will feel pressure of foreign exchange moving out. “Unfortunately, there are no short-term solutions to import substitution,” one of the sources said. “Process of industrialisation once reversed will take decades to get corrected,” he added.

The one per cent duty means that the cost of production would certainly go up and its impact may be passed on to the end consumers.

Published in Dawn, May 3rd, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Opinion

Editorial

Updated 21 May, 2022

Band-aid measure

A more pronounced impact would have been possible had the cap on energy prices been removed.
21 May, 2022

Bilawal’s defence

BILAWAL Bhutto-Zardari’s robust defence at the UN headquarters of former prime minister Imran Khan’s Feb 24 trip...
21 May, 2022

Yasin Malik’s conviction

THE conviction of veteran Kashmiri freedom fighter and head of the Jammu Kashmir Liberation Front Yasin Malik by an...
Updated 20 May, 2022

TTP peace talks

ANOTHER attempt to sue for peace with the outlawed TTP is being made, again facilitated by the Afghan Taliban that...
20 May, 2022

Beyond the law

THE senior judiciary should take care not to overreach in its zeal to ‘fix’ issues it ideally need not worry...
20 May, 2022

Political musical chairs

YET another political crisis is brewing in Balochistan, where old rivals Jam Kamal Khan Alyani and Sardar Yar...