Islamabad (October 20, 2017): In a bid to contain the ballooning bill of imported goods, the federal government has enhanced by up to 350% the regulatory duties on 356 essential and luxury items.
For the first time in last many years, government has also imposed regulatory duties on all types of imported cars, including the hybrid vehicles. The decision to enhance regulatory duties on cars is in violation of the automobile policy, approved by the federal cabinet, and could affect the new investments in the sector.
The move to impose duties on 356 tariff lines is not expected to make a big dent on $53 billion import bill that the country recorded last year but it will generate at least Rs40 billion in additional revenues for the government.
Except for vehicles, the Economic Coordination Committee (ECC) of the Cabinet on last Friday gave approval for enhancing the duty rates on the imported goods. The Federal Board of Revenue (FBR) lately decided to include cars in the list and got Finance Minister Ishaq Dar’s approval this week.
The authorities are estimating that the additional duties may help contain the import bill from around $300 million to $400 million during the current fiscal year. Some items will still be imported due their high demand, which will have inflationary implications.The government increased the regulatory duties on dairy products up to 166%. The products like yogurt, butter, cheese, curd and honey have been targeted with the additional regulatory duties, going up to 40% of the import value. As many as 203 vegetables and fruits have also been targeted with up to 350% increase in their existing duties rates.
The government also brought drastic changes in duty structure of all types of vehicles and targeted 55 tariff lines with up to 100% additional duties. It has imposed 15% regulatory duty on new cars of up to 1800cc including the hybrid vehicles.
The new mini vans and buses have been targeted with 15% regulatory duties. The duty rates on new sports cars have been increased by 60% to 80% of the import value. The old and used cars duty rates have been increased from 50% to 60%.
The duty rates on all-terrain vehicles have been increased from 50% to 80% of the value, putting additional burden of 60% on the importers. The regulatory duties on imported furniture have been doubled to 40%. All the sports goods have been slapped with 30% to 50% regulatory duties.