ISLAMABAD: A mini-budget is being deliberated upon by the top economic ministries as various plans are under consideration which includes raising additional customs duty by 1 percent on all imported items.
Alternatively, a plan to increase Regulatory Duty (RD) on 1,550 items is being considered to rein in import bill, reported The News.
According to sources in the top brass, various options are under contemplation to raise additional customs duty by 1 percent on all tariff lines of 7,200 items or increase RD on over 1,550 items.
The country’s burgeoning trade deficit ballooned to over $5 billion during FY18 and current account deficit widened to a record $18 billion during the just concluded FY18.
Various meetings have been held by Federal Board of Revenue (FBR) and Ministry of Commerce to discuss this subject but said this was the idea of the Ministry of Finance to rein in rising imports during FY19.
If the proposal for raising additional customs duty by 1 percent gets go-ahead, the exemption available would only be restricted to some items such as medicines or other raw materials.
In case of approval, it is expected to have a major impact on revenue if additional customs duty is raised by 1 percent from 3 to 4 percent.
This raise could affect the manufacturing sector negatively by increasing input costs and price of raw materials would go up.
The top officials, when reached for comment on the development, said various proposals were under contemplation but it wasn’t their creation.
Another official said, “We have proposed a list of items to the FBR on the desire of the Ministry of Finance.”
The FBR top brass was approached to ask about this development and they said this proposal may not get the greenlight during the remaining period of caretaker setup since this issue didn’t come up for deliberation during last cabinet meeting.
According to a top official from the Finance Division, the last two months have seen different steps being taken on the economic front to discourage and enhance exports.
This included raising the key interest rate in last few monetary policies, permitting the rupee to depreciate against the dollar to touch Rs130 and cash margin requirements on imports.