KARACHI: Pakistan is evaluating the introduction of heightened customs duties on the importation of used cars with engines up to 1,300cc and wheat, a move prompted by significant financial outlays this year totaling approximately $1.4 billion, which has also stirred discontent among local farmers.
According to a local media report, officials are deliberating on two budgetary measures that would reinstate customs duties on wheat imports and escalate duties on smaller used cars. Additionally, there’s consideration for a 1% increase in customs duties on various items presently taxed between 3% and 11%, which could yield an estimated Rs20 billion in the upcoming fiscal budget.
These discussions coincided with the arrival of an IMF mission in Pakistan, aimed at negotiating future economic strategies for more inclusive and resilient growth, stated Esther Perez Ruiz, the IMF’s Resident Representative.
The proposed adjustments are preliminary and expected to be reviewed by the Tariff Policy Board for potential inclusion in the 2024-25 budget. To date, the import expenditure includes $1.1 billion on 3.5 million metric tonnes of wheat and an additional $290 million for 20,000 cars.
Despite robust harvests, the previous administration under Anwarul Haq Kakar facilitated these imports, causing farmers to sell their wheat at rates significantly below the government’s support price. The current administration has initiated an investigation into these import activities.
Prime Minister Shehbaz Sharif’s government is contemplating the reinstatement of an 11% customs duty on wheat, which had been removed, and is considering a hike in duties on used cars, potentially aligning them with those for new cars of similar capacity. This is expected to generate significant revenue and control the surge in car imports experienced over the past year.
