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Pakistan Imports Updates

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Pakistan considers cut in import taxes for economic growth

Advisor to Prime Minister on Commerce and Investment, Abdul Razak Dawood, told Bloomberg that custom duties imposed on the import of raw materials required by pharmaceutical, chemical, engineering and food processing industries will be reduced to 10%.

The proposal will be floated in the upcoming budget for fiscal year 2021-22, which will be presented on June 11.

The said step is likely to decrease the import of finished goods, and boost local production which can stimulate exports as well.

“Pakistan had ridiculously high duties,” Dawood said. "The objective is to put Pakistan on par with other countries on trade taxes," he said.

After a contraction of 0.5%, Pakistan has reported Gross Domestic Product (GDP) growth of 3.94% in the current fiscal year.

As per the report, cutting taxes on import is a major policy shift for Pakistan, where over 40% tax revenue comes from levies on inbound shipments
 

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Govt proposes sharp cuts on 600 raw material tariff lines


Mubarak Zeb Khan
June 8, 2021


The National Tariff Commission has submitted to the finance ministry a report that shows that tariff rationalisation plan of the government has led to industrial growth in the country. — Reuters/File



The National Tariff Commission has submitted to the finance ministry a report that shows that tariff rationalisation plan of the government has led to industrial growth in the country. — Reuters


ISLAMABAD: The government has approved hefty cuts including exemptions on raw materials under 600 tariff lines to boost import substitutions of consumer industries and promote exports from traditional and non-traditional sectors.

The decision will be announced in the budget 2021-22. There are also several other tariff lines that will be considered for lower duty reduction. In the budget 2020-21, the government has reduced tariff on 2,000 tariff lines.

Ahead of the next budget, the National Tariff Commission has submitted to the finance ministry a report that shows that tariff rationalisation plan of the government has led to industrial growth in the country. Exemption of duty on raw materials leads to its bulk import and subsequent exports of those industries.

As a result of this at sector level, exports of textile, articles of wood, rubber, plastic, glass, metal, chemicals and electrical appliances are significantly effected by change in intermediate input tariffs.
The study reveals that 1pc decrease in tariff leads to an increase in import volume by 2.8pc. Similarly, the price of raw materials (unit value) decreases by 0.6pc with a 1pc reduction in tariff at import level.

The government withdrew 3pc customs duty (CD) and 2pc additional customs duty (ACD) on import of jute fibre, a raw material, in 2019-20. As a result of the rationalisation, import value of jute fibre increased to $50.2 million in 2020-21 from $30.7m. The export of jute fabric rose to $7.8m in 2020-21 from $0.013m in previous year. It clearly establishes a link between tariff reduction and its subsequent increase in exports.

The nitrile-butadiene rubber (NBR) is used in industrial gloves. The government exempted 3pc CD, 2pc ACD in 2019-20. As a result, the import value of NBR increased to $6.6m in 2020-21 from $4.1m previous year. The exports of industrial gloves reached to $92.4m in 2020-21 from $67.4m in 2018-19.

The government exempted 3pc CD, 2pc ACD on wood pulp a raw material used in paper and paper board. The import value of the raw material increased to $8m in 2020-21 from $6m previous year. And the export of finished product paper and paper board reached $3m in 2020-21 from $0.7m in previous year.

The government exempted 3pc CD and 2pc ACD on import of tyre cord, a raw material used in the manufacturing of motorcycle tyre, in 2019-20. The import value of the raw material reached $18.3m in 2020-21 from $13.9m in previous year. The export of motorcycles tyre rose to $9.65m in 2020-21 from $4.03m in 2018-19.

Similarly, the government exempted 3pc CD and 2pc ACD on natural rubber a raw material used in manufacturing of footwear. As a result, export of footwear increased to $28.058m in 2020-21 from $20.851m in the previous year. The growth was also seen in quantity terms.

The 20pc CD, 7pc ACD and 5pc regulatory duty (AD) was abolished on glass boar, a major raw material of LCD and LED in 2019-20. The LCD and LED units reached 59,990 units in 2020-21 from 7,452 units in the previous year. It clearly reflects the impact of tariff rationalisation.

The government has done away with 7pc ACD, 5pc RD and reduced CD from 20pc to 5pc on import of polymers of ethylene, non-woven fabric, raw material used in diapers. As a result, import value of diapers reached $50.293m in 2020-21 from $13.550m the preceding year. The growth was also seen in quantity as well.

Palm stearin and tallow raw materials used in manufacturing of toilet soap. The government abolished 2pc ACD and reduced CD to 5pc from 11pc on these raw materials. As a result, production of toilet soaps increased to 200,000 tonnes in 2020-21 from 155,000 tonnes in 2018-19. The export of toilet soaps increased to 16,000 tonnes in 2020-21 from 8,000 tonnes in 2018-19. Pakistan is one of the major supplier of toilet soap to European Union.


Published in Dawn, June 8th, 2021
 

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Govt to Spend $1 Billion to Import More COVID-19 Vaccines


Economic Coordination Committee (ECC) will meet today to approve the grant of $1 billion for the import of more COVID-19 vaccines during the next fiscal year.
 

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Pakistan’s imports have crossed $50 billion in 11 months of the outgoing fiscal year – the second time in three years, posing a new challenge for the government as growth in exports remain less than half of the pace of increase in imports.

Resultantly, the trade deficit widened to $27.5 billion and exceeded the annual target by $8 billion in the 11-month period of the current fiscal year, reported the Pakistan Bureau of Statistics (PBS).

For the current fiscal year, the government had set the trade deficit target at $19.7 billion, which was busted in just 10 months.

The deficit was higher by $6.4 billion or 30.6% over the same period of previous year, according to the PBS.




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Oil, ghee import on sugar-wheat pattern likely

Mushtaq Ghumman
12 Aug 2021





ISLAMABAD: The government is likely to import edible oil/ghee on the pattern of sugar and wheat aimed at facilitating supply to reduce prices in the local market, well-informed sources told Business Recorder.

This plan was discussed at a recent meeting of National Price Monitoring Committee (NPMC) presided over by Finance Minister Shaukat Tarin. He also expressed anger over the Competition Commission of Pakistan (CCP) for not taking action against Pakistan Vanaspati Manufacturers Association (PVMA) to break its cartelization.

“The Finance Minister directed that Ministry of Industries and Production, CCP and FBR take strict action against cartelization in vegetable ghee sector and workout possibility of import of vegetable ghee/edible oil to facilitate domestic supply and control its price to make it affordable for consumers” the sources added.

The Finance Ministry has been apprised that some key CCP decision makers have “vested interests” in ghee/edible oil industry due to which action is not being taken despite the fact the CCP has convincing official record of cartelization in this sector.

Secretary Finance briefed NPMC members and stated that SPI for the week ended on 5th August has been recorded at 0.12 percent. Prices of 11 items declined, 23 items remained stable and prices of 17 items increased slightly.

The Finance Minister directed that Secretary Finance to hold a consultative meeting with provincial Chief Secretaries and PBS to sort out data issues, if any, prior to NPMC meeting; Provincial governments need to take necessary actions, where prices of essential items are higher.

Secretary Finance also elaborated on the price movement of food and fuel items in international market. It was observed that prices of palm oil increased by 4.7 percent, soyabean oil 3.4 percent and crude oil 1.8 percent in July 2021 over the previous month while wheat prices decreased by 8.8 percent and rice prices by 9.5 percent. Finance Minister also showed concern at the huge profit margin in sale of essential items in Punjab.

Secretary NFS&R highlighted that prices of wheat are higher in the international market and the major chunk of imported wheat, approved by ECC, would arrive in September, while the international market will presumably remain stable as per past practice. Chief Secretary Punjab said that price of wheat is stabilizing due to the timely decision of importing wheat and at present wheat reserves are enough to meet demand.

Tarin directed that the Ministry of National Food Security and Research under the supervision of SAPM on NFS&R formulates a strategy on building strategic reserves of essential items to maintain its supply and control price hike in the country.

Ministry of Industries & Production revealed that it has already notified the price of sugar in the last week, however, court has issued stay order against it; Finance Minister directed TCP to import sugar as per the timeline of ECC and in compliance with the Cabinet decision.

Secretary Industries & Production, Kamran Afzal noted that under the Rules of Business sugar related matters are the mandate of the Ministry of National Food Security and Research. During the meeting Petroleum Division was instructed to present and share comparison of previous week’s stock position of petroleum products in every NFMC meeting; and directed to prepare feasibility for expanding the USC outlets across Balochistan keeping in view suitable locations so that maximum people can benefit from it.

The meeting decided that Secretary MNFS&R would hold a meeting with Secretary Industries & Production, Secretary Commerce and Chairman TCP to workout strategic reserves of sugar and also expedite its import to prevent its shortage in domestic market till end November, 2021.

It was decided that Petroleum Division would present previous week’s stock position of petroleum products in every NPMC meeting along with the comparison of last year with the current week.

Secretary Finance would also hold a consultative meeting with provincial Chief Secretaries and PBS to sort out data issues, if any prior to NPMC meeting. Provincial governments will take necessary action where prices of essential items are higher.

The meeting was attended by the Special Assistant to the Prime Minister on NFS&R and SAPM on Finance & Revenue, Provincial Chief Secretaries, Secretary NFS&R, Secretary Industries & Production, Chairman FBR, Additional Secretary Mb o PD&SI, Chief Commissioner ICT,
Chairperson CCP, MD USC, MD Passco, Chairman TCP, DDG National Accounts PBS, representative of Petroleum Division and senior officers of the Finance Division.

Copyright Business Recorder, 2021
 

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Pakistan’s production of mobile phones by local manufacturing plants exceeded the number it imported during January to July 2021.

The total production was higher during January-July 2021, when 12.27 million mobile phones were produced locally while the country imported only 8.29 million phones.
 

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Pakistan tenders to buy 90,000 tonnes wheat

Reuters
16 Oct 2021


HAMBURG: A government agency in Pakistan has issued an international tender to purchase and import 90,000 tonnes of wheat, European traders said on Saturday.

The deadline for submission of price offers in the tender from the Trading Corporation of Pakistan (TCP) is October 25.

A new tender had been expected after Pakistan made no purchase in a previous tender for 90,000 tonnes of wheat this week.
 

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Pakistan said to pass in 50,000 tonnes sugar tender, issues new tender
  • The TCP has also issued a new tender for 50,000 tonnes of bagged white sugar

Reuters
16 Oct 2021





HAMBURG: Pakistan's state trading agency the Trading Corporation of Pakistan (TCP) is believed to have made no purchase in an international tender for 50,000 tonnes of sugar which closed on Oct. 13, European traders said on Saturday.

The TCP has also issued a new tender for 50,000 tonnes of bagged white sugar, they said.

The deadline for submission of price offers in the new tender is Oct. 25.
 

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