ISLAMABAD: The government has proposed 20 percent customs duty and regulatory duty on the import of edible oils and oilseeds under the implementation plan of the National Oilseed Policy.

Sources told Business Recorder that the new taxation proposals have been specified in the new National Oilseed Policy.

A huge target of making the country self-sufficient for 60 percent of the total requirement of edible oils locally has been set to achieve by 2033-34 under the National Oilseed Policy.

Edible oil & seeds: Call for urgent steps to increase production

In monetary terms, there would be a substitution of $7.668 billion. This is a huge amount if we compare it with our current financial crises. To meet these targets bold decisions and firm commitments are required.

The prerequisites of the National Oilseed Policy have been finalised under the implementation plan: (I); Profitable Intervention Price (PIP): The announcement of Profitable Intervention Price (PIP) for sunflower, canola/rapeseed and mustard and sesame equal to I-1/2 times cost of productions of these crops to encourage growers.

(ii) Regulatory Duty (RD): The commitment to impose regulatory duty on imports of edible oils and oilseeds if required to ensure PIP. This would not be a unique intervention. The government already imposes RDs on imports of wheat (60 percent), sugar (40 percent) and maize (30 percent) to protect local growers. The quota restrictions or other non-tariff measures to protect local oilseed growers may not be supported because these will increase the prices of ghee and cooking oils which will affect consumers and there would not be any revenue generation for target subsidy to vulnerable population.

(iii): Uninterrupted Provision of Financial Resources for National Oilseed Policy: The rates of cess which are currently Rs50 per ton on imported edible oils and 10% of the custom duty on oilseeds (Cess on edible oils was levied in 1994 and on oilseeds in 2000) may be raised to Rs1,000 per ton and 20 percent of the custom duty, respectively. Around Rs5.5 billion annually will be available in cessfund.

The cessfund balance with the Federal Board of Revenue (FBR) may also be transferred to POD’s cessfund.Around Rs15 billion would be available after transfer of cessfund from the FBR and re-appropriation of NOEP funds.

The new policy has also defined the role of the Pakistan Oilseed Department (POD) in implementation of the National Oilseed Policy; the POD will be responsible to coordinate with provincial and federal departments to orchestrate all the activities/actions mentioned in the implementation plan for the execution of National Oilseed Policy through provinces. This would be a very challenging task to accomplish with the current exhausted structure of the POD.

Copyright Business Recorder, 2023