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ISLAMABAD: The government has proposed 20 percent customs duty and regulatory duty on the import of edible oils and oilseeds under the implementation plan of the National Oilseed Policy.

Sources told Business Recorder that the new taxation proposals have been specified in the new National Oilseed Policy.

A huge target of making the country self-sufficient for 60 percent of the total requirement of edible oils locally has been set to achieve by 2033-34 under the National Oilseed Policy.

Edible oil & seeds: Call for urgent steps to increase production

In monetary terms, there would be a substitution of $7.668 billion. This is a huge amount if we compare it with our current financial crises. To meet these targets bold decisions and firm commitments are required.

The prerequisites of the National Oilseed Policy have been finalised under the implementation plan: (I); Profitable Intervention Price (PIP): The announcement of Profitable Intervention Price (PIP) for sunflower, canola/rapeseed and mustard and sesame equal to I-1/2 times cost of productions of these crops to encourage growers.

(ii) Regulatory Duty (RD): The commitment to impose regulatory duty on imports of edible oils and oilseeds if required to ensure PIP. This would not be a unique intervention. The government already imposes RDs on imports of wheat (60 percent), sugar (40 percent) and maize (30 percent) to protect local growers. The quota restrictions or other non-tariff measures to protect local oilseed growers may not be supported because these will increase the prices of ghee and cooking oils which will affect consumers and there would not be any revenue generation for target subsidy to vulnerable population.

(iii): Uninterrupted Provision of Financial Resources for National Oilseed Policy: The rates of cess which are currently Rs50 per ton on imported edible oils and 10% of the custom duty on oilseeds (Cess on edible oils was levied in 1994 and on oilseeds in 2000) may be raised to Rs1,000 per ton and 20 percent of the custom duty, respectively. Around Rs5.5 billion annually will be available in cessfund.

The cessfund balance with the Federal Board of Revenue (FBR) may also be transferred to POD’s cessfund.Around Rs15 billion would be available after transfer of cessfund from the FBR and re-appropriation of NOEP funds.

The new policy has also defined the role of the Pakistan Oilseed Department (POD) in implementation of the National Oilseed Policy; the POD will be responsible to coordinate with provincial and federal departments to orchestrate all the activities/actions mentioned in the implementation plan for the execution of National Oilseed Policy through provinces. This would be a very challenging task to accomplish with the current exhausted structure of the POD.

Copyright Business Recorder, 2023

Comments

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M.Ashfaq May 04, 2023 06:51pm
Government should reduce duties on oils and should rise or not decrease duties on cars and mobiles and other luxury items... But we don't like to pass relief to common men.
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I Afzal May 05, 2023 05:22am
@M.Ashfaq, by implementing this they are passing relief to the common man in the form of farmers. As an incentive to plant oilseeds. Currently there is a huge disparity between the prices of imported and locally grown oil seeds.
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Salim May 05, 2023 02:18pm
@I Afzal, Are you living in Pakistan? Are we so naive to think that the RD would not effect the common citizens? We Pakistanis are the worst nation in world. The oil manufacturers will increase the price on some excuse or the other. And the less said about the government the better.
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Az_Iz May 05, 2023 04:49pm
Most of the food prepared in the country is soaking in oil, which is imported at a huge cost, and is not healthy. If the duties can bring down the consumption, all the better.
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Az_Iz May 05, 2023 04:56pm
Imported cheap cooking oil to make dishes soaking in oil ,which is also unhealthy. Probably the only country which wants to keep retail stores open until after midnight, and consume electricity produced from imported fuels Sell petrol at half the price of what it is in India, which thankfully is not the case anymore. Country cannot live like this and burn foreign exchange, which should be better utilized for building physical, health and education infrastructure.
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Imran Khawaja May 06, 2023 09:42am
Ref 20% RD on edible oil proposed will be blunder and there will be fire in edible oil market taking it from 15400 - 500 to May be 20,000 per mon . In India they keep on changing the duty structure on edible oil as per their local production and not on predictions that in 2033 we will be self sufficient in edible oil .
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M. Ashraf May 06, 2023 11:22am
@Imran Khawaja, no new duties are being proposed only cess rate, which was Rs. 0.05 per kg on the import of edible oil is being proposed to levy @ Rs.1/- per kg. There will be no change in current duties on the imports of oilseeds for crushing. Only rate of cess which was previously 10% of the duty collected is now would be 20% of the duty collected. There is no change in custom duty. These both types of cess are levied for promotion of oilseed crops in the country
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Tulukan Mairandi May 06, 2023 10:43pm
Make it 30% instead. Don't forget the London cut of 10% to feed our lion of Pakistan, Nawaz Sharif.
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