ISLAMABAD, May 14: The government has dropped a proposal to include zero per cent slab in the Pakistan customs tariff in the budget for 2005-06. An official told Dawn on Saturday that the withdrawal of proposal of zero per cent slab from the customs tariff meant that it would now be difficult to consider reduction in custom duty from five per cent to zero per cent on import of raw materials and machinery.

According to the official, the decision was taken by Prime Minister Shaukat Aziz on the recommendation of the commerce ministry that opposed the CBR proposal. The Central Board of Revenue has worked out a strategy, envisaging inclusion of zero per cent and 15 per cent slabs in the tariff and a reduction of maximum tariff to 20 per cent.

At present there are four slabs in the customs tariff — 25pc, 20 per cent, 10pc and five per cent. Trade bodies and the ministry of textile industry have proposed to the government to slash the rate of duty to zero per cent on import of textile related machinery and raw materials in the upcoming budget.