The federal government confirmed that it is in discussions with the International Monetary Fund (IMF) regarding the exemption of duties and taxes on sugar imports.
Speaking at a meeting of the National Assembly Standing Committee on Finance, Finance Secretary Imdadullah Bosal said that one of the agreed structural benchmarks between the IMF and Pakistan is the avoidance of tax exemptions or amnesty schemes. However, he confirmed that consultations with the IMF are ongoing on the matter of sugar import tax exemptions.
The Federal Board of Revenue (FBR) had previously granted customs duty exemptions on the import of 500,000 metric tons of sugar, alongside reducing the sales tax rate from 18% to 0.25% and withholding tax to 0.25%. Furthermore, the FBR also waived a 3% minimum VAT on the sugar import.
Despite these exemptions, FBR Chairman Rashid Mahmood Langrial clarified that the FBR had not proposed any summary to the federal cabinet regarding these exemptions. The cabinet had instead made the decision based on a summary from the Ministry of National Food Security and Research (MNFSR).
Langrial further stated that while taxes on sugar typically total 54%, including a 20% import duty, high import tariffs on the commodity should be reconsidered, given that sugar prices had previously dropped to Rs 130 per kg.
However, Committee Chairman Naveed Qamar raised concerns, asserting that there is no sugar shortage in the country, questioning the need for imports given the existing adequate stock.
He suggested that the focus should be more on the de-regulated wheat market rather than sugar, which is regulated in Pakistan.
