ISLAMABAD: Finance Minister Miftah Ismail, Saturday, stated that to comply with international obligations, the government has issued an SRO to reverse the ban on imports of luxury items.
The finance minister tweeted that “to meet with our international obligations, the government has issued an SRO to reverse the ban on imports of luxury items. The goods stuck at the ports will gradually be released with penalty surcharge of up to 100 percent of assessed value”.
He added that “Tariff Policy Board will soon come up with new regulatory duty (RD) rates that will ensure that limited foreign exchange is spent on essential items and not on these items that we have un-banned. We must live within our means”.
On Thursday, the finance minister had announced that the government has decided to lift the ban imposed on luxury and non-essential items but stated that the government would impose RD, CD, and sales tax at much higher rate to discourage import.
Miftah announces to remove import restrictions, but with a caveat
Subsequently, on Friday, the Economic Coordination Committee (ECC) of the Cabinet has approved a summary moved by the Ministry of Commerce seeking the removal of the ban on the import of luxury and non-essential items. The ministry in the summary stated the ban was imposed on import of about 33 classes/ categories of goods vide SRO 598 (1) on 19th May 2022 with the objective to curtail the rising current account deficit (CAD).
However, as import data shows that there is a declining trend of imports since the imposition of ban, the ban may be lifted. The Minister stated that overall imports of the banned items has shrunk by over 69 per cent –from $399.4 million to $123.9 million for the period 20 May 2022 to 19 July 2022. The major contributors in this reduction of approximately US$ 275.5 million are auto CBU and mobile CBU imports with 79 per cent share in the total reduction. While the remaining 21 per cent reduction spreads over 810 tariff lines impacting multiple sectors of the economy including those businesses which are foreign investment in Pakistan.
Copyright Business Recorder, 2022
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