ISLAMABAD: The government is likely to impose regulatory duties on a number of items to curtail the rising budget deficit.
This will be its fourth recourse to regulatory duties to curb “non-essential imports” and raise revenue for achieving the ambitious collection target of Rs4 trillion.
Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan confirmed to Dawn that a summary was sent to the Ministry of Commerce for consultation about the imposition of regulatory duties on new products as well as raising the duty rates on some existing ones.
Mr Khan said the list is being finalised in consultation with all stakeholders. “We have sent the summary to the Ministry of Commerce for feedback,” he said, adding that it will then be submitted to the Economic Coordination Committee of the cabinet for final approval. He said the purpose of regulatory duties is to curtail the flow of imports.
Official figures show that growth in the overall import bill came down to 10 per cent in December on a year-on-year basis. “The deceleration in the import bill is the outcome of the regulatory duties imposed in October 2017,” he said.
He said the proposed measures will not only provide protection to local manufacturers but also discourage imports. “We don’t expect much revenue impact from these measures,” the special assistant said. Mr Khan recently received the status of federal minister for revenue.
Asked whether the year-on-year drop was in duty-free imports as well, he said he had not checked it so far. However, he said the overall flow of importable products slowed down considerably.
Additional revenue generated through these regulatory duties will be used to provide subsidy on exports and clear outstanding refunds/rebates.
The Federal Board of Revenue is already working on a plan to repay sales tax refunds. However, no final date has been finalised in this regard.
In the 2017-18 budget, the government raised regulatory duties on 565 tariff lines.
Published in Dawn, January 13th, 2018