As part of a broader attempt to protect the country’s forex reserves, the interim government is working on imposing hefty regulatory duties on roughly 1,100 luxury and non-essential import items.
Dawn reported that the government is actively working to bring back regionally competitive gas/electricity rates for five export-oriented sectors, with possible revisions acceptable to the International Monetary Fund (IMF).
At recent sessions of the Special Investment Facilitation Council (SIFC), suggestions were thoroughly reviewed.
It has been indicated that roughly 1,100 items will be subject to varied levels of regulatory oversight. Adjustments on rules pertaining to the import of three-year-old vehicles (both small and luxury) are being actively considered. Notably, many of the commodities under consideration for regulatory duties are also crucial intermediary raw materials for export sectors, such as textiles and, in particular, chemicals, and footwear.
Cooking oil would now be the second most important commodity to face a regulatory tariff, reducing usage and thus foreign exchange losses.
Small automobiles would be permitted for ex-pats remitting $50,000 back home per year, while the same cap would exceed $5 million for luxury vehicles.
The finance ministry has pursued a pricing policy for petroleum products to recoup the full imported cost, including exchange rate losses. It is expected that the levy on diesel would rise more in the following months.
Commerce Minister Ejaz suggested at the SIFC meetings last week to reinstate the zero-rated status and regionally competitive tariffs that the previous government had withdrawn in order to meet IMF terms.
If approved, the scheme could be partially restored based on increased energy consumption and higher exports.
Meanwhile, export sectors, particularly textiles, could be allowed direct electricity purchase from local power plants in exchange for payment of wheeling charges to distribution companies, ensuring uninterrupted supply and fluctuation-free load.
