Pakistan is aiming at reducing some taxes on the imports of raw materials to increase growth in the manufacturing industry and to promote overall economic growth, as announced by the Adviser to the Prime Minister on Commerce and Trade, Abdul Razzak Dawood.
He said that this policy will be applicable to the raw materials for the pharmaceutical, chemical, engineering, and food processing industries, according to a report by Bloomberg. They will be reduced by three percent to 10 percent, he added.
Dawood further said that this will help to lower the import of finished goods while improving local production, thus allowing Pakistan to improve its exports.
“Pakistan had ridiculously high duties,” he said, adding that the objective of the new policy is to put Pakistan on par with other countries for trade taxes.
The proposal to reduce the import taxes on the specified industries will be presented for the upcoming federal budget for the next fiscal year, which is scheduled to be presented in the parliament on 11 June.
Considering that Pakistan earns nearly 40 percent of its total tax revenue through import taxes, reducing them will be a huge shift for the current government.
The economic team is aiming at lessening the country’s reliance on foreign bailout programs by strengthening exports for which concessional long-term financing and working capital financing will also be made part of the new policy, Dawood said.