The Federal Board of Revenue is planning to bring down standard customs duty slabs of 30 and 35 percent to 20 and 25 percent, respectively, with a view to rationalising tariff in the Budget (2011-12). Sources told Business Recorder here on Friday that the Pakistan Customs Department has been reviewing the policy to rationalise tariff for a long time.
It reduced its rates from 125 percent in 1988-89 to 25 percent in 2007-08, in view of its national requirements and international commitments. However, in 2008-09 when the international commodity prices were at their peak and the government was facing sever shortage of forex reserves, customs duty on approximately 397 items was increased which again raised our normal tariff to 35 percent. The tariff rationalisation is a continuous process, which evolves with the requirements of changing time.
Under the plans, sources said that the process of tariff rationalisation will continue in the light of input from all the stakeholders. Depending upon the prevailing economic conditions at the time, particularly the position of foreign exchange reserves, proposal for downward revision of tariff rates of 30 percent & 35 percent, increased in 2008-09 from 20 percent & 25 percent respectively, will be considered at the time of next budget (2011-12). This measure will divert the smuggled goods to legal regime, which will, in-turn, increase the revenue.
At the time of announcement of Budget (2010-11), the government has not increased customs duty on the import of any item despite the fact that government needs revenue, which was highly appreciated. It was further claimed that the prices of at least 29 items were reduced due to cut in the customs duty in budget 2010-11. In budget 2008-09, the FBR had increased rate of duty on different items to discourage the import of non-essential and luxury items.
At that time, duty rates were enhanced on different items in budget 2008-2009 including dairy products, fruits, chocolate, processed food like macaroni, corn flakes, biscuits, potato chips, processed packed vegetables/fruit products etc 25, 35; fruit juices, soup, ice cream etc, aerated water, cosmetics, marble/granite products, ceramic products, electric fans, air-conditioners, refrigerators, deep freezers, food grinders mixers, hair dryers, electric ovens, cooking ranges etc, coffee makers, toasters, microwave evens, cassette players LCD/TV/other TVs, furniture, chandeliers, CKD/SKD of sewing machines, Cars and jeeps of 1800cc engine capacity and above and other items on which duty was raised in Budget 2008-09.
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