The caretaker government is planning on imposing heavy regulatory charges on around 1,100 luxury and non-essential import items as part of a larger effort to protect the country’s FX reserves.
Caretaker govt on imposing heavy charges
According to reports, the administration is working hard to restore regionally competitive gas and power pricing for five export-oriented sectors, with probable changes acceptable to the International Monetary Fund (IMF).
SIFC Sessions
Suggestions were thoroughly evaluated at recent Special Investment Facilitation Council (SIFC) sessions.
It has been stated that approximately 1,100 goods will be subject to varying levels of regulatory scrutiny.
Changes to the rules governing the importation of three-year-old vehicles (both small and luxury) are being actively explored.
Consideration for Regulatory Tariffs
Notably, many of the commodities under consideration for regulatory tariffs are also critical intermediary raw materials for export sectors, such as textiles, chemicals, and footwear.
Cooking oil would now be the second most significant commodity to face a regulatory tax, resulting in decreased usage and hence foreign exchange losses.
Small autos would be authorised for ex-pats remitting $50,000 back home per year, but luxury vehicles would be subject to a ceiling of $5 million.
The finance ministry has pursued a pricing approach for petroleum goods that seeks to recover the full import cost, including exchange rate losses. The diesel tax is projected to rise more in the coming months.
At the SIFC meetings last week, Commerce Minister Ejaz proposed restoring the former government’s zero-rated status and regionally competitive tariffs in order to meet IMF criteria.
If authorised, the programme might be partially restored on the basis of rising energy consumption and exports.
Meanwhile, export sectors, particularly textiles, should be permitted to acquire direct electricity from local power plants in exchange for payment of wheeling charges to distribution companies, assuring continuous supply and stable load.
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