Will the governments ban on luxury goods help Pakistan's economic recovery?

[MenInG]

Gimmick or well thought-out policy?

==


Prime Minister Shehbaz Sharif on Thursday said that the decision to ban the import of luxury items will save the country's precious foreign exchange, vowing to take similar measures to overcome the economic challenges at hand.

"We will practice austerity and financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI government," PM Shehbaz said in a Twitter post.

He added: "Together we will overcome all the challenges with resolve and determination, InshaAllah!"

A day earlier, the prime minister gave the go-ahead to a temporary ban on the imports of around three-dozen goods – essential and luxury items – but refused to slap regulatory duties to curb imports.

He also permitted to limit the imports of many goods -- including completely knocked down (CKD) cars and mobile phone kits -- by half of the last month’s imports, sources privy to the meeting had revealed to The Express Tribune.

The decision to ban certain goods and impose quantitative restrictions on others will be temporary, only for two to three months, according to a senior government functionary.

The government will face a challenge to secure the IMF’s nod for placing restrictions on imports. It will also have to notify the World Trade Organization about the measures and the global free trade body then seeks the IMF’s input on whether Pakistan’s economic conditions warrant such drastic measures.

The estimated monthly impact of the measures is not more than $300 million, indicating that the government is not in a mood to severely curtail economic growth in the new fiscal year leading to the next general elections.

PM Shehbaz did not accept the proposals to increase regulatory duties on imported goods and also rejected recommendations to ban the import of cheese, chocolates and other foods largely imported from Europe.

The European Union is Pakistan’s single largest export destination and helps Islamabad earn additional dollars through the GSP plus tariff reduction scheme.

However, such food items will be subjected to quantity restrictions aimed at lowering the country’s reliance on the goods to the extent possible without irritating the largest export destination’s partner.

https://tribune.com.pk/story/2357342/luxury-items-import-ban-to-save-precious-foreign-exchange-pm

 

[MenInG]

Information Minister Marriyum Aurangzeb announced on Thursday that the government has imposed a ban on the import of 38 non-essential luxury items under an "emergency economic plan".

She made the announcement while addressing a press conference in Islamabad. Shortly after, Prime Minister Shehbaz Sharif took to Twitter to say that the decision would "save the country precious foreign exchange".

"We will practice austerity and financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI government," he said, adding that the nation would overcome these challenges with "resolve and determination".


The decision comes as the dollar has witnessed a meteoric rise against the rupee over the past few weeks on account of the country's rising import bill, growing current account deficit and depleting foreign exchange reserves. On Thursday, the dollar shattered all records and soared to Rs200 in the interbank market.

During her press conference, the information minister assured the nation that PM Shehbaz was "working day and night to stabilise the economy".

Aurangzeb said that in light of this, it was decided to impose a ban on the import of all non-essential luxury items. "These items are those which are not in use of the general public," she said as she identified imported vehicles as one such item.

List of banned items
Automobiles
Mobile phones
Home appliances
Fruits and dry fruits (except from Afghanistan)
Crockery
Private weapons and ammunition
Shoes
Chandeliers and lighting (except energy savers)
Headphones and loudspeakers
Sauces
Doors and window frames
Travelling bags and suitcases
Sanitary ware
Fish and frozen fish
Carpets (except from Afghanistan)
Preserved fruits
Tissue paper
Furniture
Shampoos
Confectionary
Luxury mattresses and sleeping bags
Jams and jelly
Cornflakes
Toiletries
Heaters, blowers
Sunglasses
Kitchen ware
Aerated water
Frozen meat
Juices
Pasta
Ice cream
Cigarettes
Shaving goods
Luxury leather apparel
Musical instruments
Salon items like hair dryers etc
Chocolates
She declared that it was "an emergency situation" and Pakistanis would have to make sacrifices under the economic plan, adding that the impact of these bans would be around $6 billion.

She said that import orders where the letter of credit had already been opened or where payment had been made would be processed but no newer ones would be entertained.

"We will have to reduce our dependency on imports," she said, adding that the government was now focusing on exports. The minister said that under the government's economic plan, local industries would prosper while employment opportunities would also arise.

She said the new measures would also have an impact on the current account deficit, adding that this step had been taken under an "emergency economic plan". She said that a meeting will also be held later today on how to reduce the impact of energy prices on consumers.

Criticising the PTI-led former government, Aurangzeb said that former prime minister Imran Khan had put all the cases against his own regime on the backburner. She held the PTI government responsible for the exponential rise in inflation and for committing "economic terrorism".

"He promised an unfunded [fuel] subsidy and played with the economy. He tried to trap the incoming government," she claimed, adding that Imran was woefully unaware of the country's economic problems.

Rejecting the PTI's continuous calls for conducting early elections, the minister asserted that the government and its allies would make a decision in this regard, not the other way around. "It is our decision when to hold elections [...] If you intended to hold elections, you would have done so before the no-trust motion was submitted."

Aurangzeb maintained that only the current government could steer the country out of the current economic crisis. The prime minister is working on reducing inflation but such decisions require round-the-clock efforts, she said.

"We have the capacity and experience to fix the current economic issues. The step taken to ban imported items is aimed at stabilising the economy."

Responding to a question, the minister also said that PM Shehbaz would address the nation in a day or two and "explain the entire situation".

'Measures will be inconsequential'
Meanwhile, PTI leader Hammad Azhar questioned the government's move, arguing that these items only made up a small percentage of the country's import bill.

"Millions of traders and shopkeepers will be affected by these steps and it will also have an effect on bilateral trade," he said on Twitter, adding that it would also contribute to a rise in smuggling.

DAWN

 

[Bewal Express]

Just gimmicks when they have no idea on the main issues. They promised a cut in petrol prices, when are they coming?

 

[Hermoine Green]

Bad move, it's big day for smugglers & black market, now they can charge more.

Duties on everything increases make everything expensive but can't raise prices of petroleum products, which contribute almost 50% imports.

Actually duties in these, will slow down growth more downwards & at the same time offering subsidy on major import 'Oil', will increase its demand more.

So it wont have any effect.

 

[MenInG]

 

[MenInG]

Add your votes to the poll

 

[Stewie]

Let me get this straight: How do the poor bear the brunt of the Foreign Exchange money?

If they are not buying any of these products, are they really paying for any of the alleged foreign exchange tax or whatever the hell it is?

 

[Kianig89]

Just gimmicky these jokers have no clue about economy they are catastrophe

 

[Bewal Express]

Apparently it will cost 200bn rps to the exchequer and cut imports by 1.3% from our total import bill.

 

[Hermoine Green]

U-turn has been taken jokers.

 

[Hextro]

The import of mobile phones hasn't been banned even though the minister shared it in the list of banned items yesterday.

Incompetence personified.

 

[Hermoine Green]

The import of mobile phones hasn't been banned even though the minister shared it in the list of banned items yesterday.

Incompetence personified.

Ban on imported cars is also being removed.

 

[Hermoine Green]

The import of mobile phones hasn't been banned even though the minister shared it in the list of banned items yesterday.

Incompetence personified.

Offcourse they had to do it, yesterday when Maryam Aurangzeb was announcing the ban on imported stuff, she was wearing Imported watch, Iphone, imported bag and even imported BMW )

 

[Hextro]

Ban on imported cars is also being removed.

So basically they aren't banning anything that would make a difference to our CAD. Good to know.

 

[Hermoine Green]

So basically they aren't banning anything that would make a difference to our CAD. Good to know.

As the govt banned a huge list of products e.g carpets, confectionery, shoes, bags & appliances.

Did they consider, what will happen to the branded outlets like Adidas, Charles & Keith & Bosch that sell imported products?

Will they shut down their business? Loss of jobs & taxes

 

[offstump]

They have no idea what they’re doing. Their economic knowledge is elementary at best; ban this, extend working hours, etc. absolutely idiotic.

 

[Bewal Express]

Incompetent, clueless morons

 

[Kianig89]

All they can do is these paper tricks nothing tangible just wait more amusement to come in Budget

 

[topspin]

If you want to replicate IK performance then this is the way to do it.

Shehbaz Sharif hang your head in shame!

 

[Savak]

These are the same exact measures that the PDM criticized PTI for in the last 3.5 years. This is not what the business community expected from them.

 

[wasim-fan]

This is just the beginning. There is more stuff going to come. Pakistan will have to be put through severe stressful economic restructuring over next 5-7 years. GDP growth doesn’t mean anything if you don’t have liquidity. Liquidity cannot be achieved till you have massive trade deficit to fund. Currency will keep getting hammered. Heart of the problem is lack of investments especially foreign investments.

Any amount of Saazish and Jalsas won’t change economic fundamentals. It’s going to unravel soon. Economic emergency is only way out.

 

[MenInG]

<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Thank you to Karachi's business community for the invitation to speak. I explained the rationale behind the ban on import of luxury items: saving scarce foreign exchange, dollar stabilization, ending social imbalance & strengthening local industry.</p>— Shehbaz Sharif (@CMShehbaz) <a href="https://twitter.com/CMShehbaz/status/1528046793099038722?ref_src=twsrc%5Etfw">May 21, 2022</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

[transparent opacity]

'Absurd', 'too easy': Experts on government banning luxury imports

Economic experts are skeptical of the government’s recent measures to ban the import of 38 non-essential luxury items, in a bid to contain Pakistan’s rising import bill and stabilise its national economy.

Last week, in a press conference, Information and Broadcasting Minister Marriyum Aurangzeb insisted that such "emergency" steps would save Pakistan $6 billion annually. But economic and financial experts are not convinced.

“Import curbs are an absurd response to Pakistan's economic challenges,” Shahrukh Wani, an economist at the International Growth Centre based at the University of Oxford, told Geo.tv, “Pakistan's fundamental problem is the lack of exports, not its imports.”

Recently, Pakistan’s liquid foreign currency reserves slid to just above $10 billion, while the Pakistani rupee weakened to over 200 against the US dollar. To add to its troubles, the country’s imports jumped to $65.5 billion in the first 10 months (July-April) of the ongoing fiscal year 2021-22.

The imports are further projected to touch between $75 billion to $78 billion by the end of June.

With only $16.16 billion reserves left, as of May 13, Pakistan has barely enough to cover imports for the next two months.

During such an economic emergency, slashing non-essential items from the import bill is being seen as more of a "populist" measure rather than a "substantial" one.

“These curbs won't fix Pakistan's trade deficit,” explains Wani, “As most of the products under the import ban make up a very small part of Pakistan's imports. The most significant items on the [list of] restrictions are automobiles and mobile phones, but even with them, this won't make a substantial difference.”

The 38 items, now banned, make up only 4 to 5% of Pakistan’s total import bill, according to an estimate by brokerage houses, based on the data of the financial year 2021.

Whereas, a larger chunk of the country’s imports are petroleum, machinery, edible oils, and chemicals, all of which are necessary for running the economy.

There is another problem. Slicing out luxury items from the import list also means a decline in the tax revenue collection of the Federal Board of Revenue (FBR).

In the first ten months of the ongoing fiscal year 2021-22, over 50% of FBR’s revenue was collected at the import stage. If tax collection shrinks then Pakistan will not be able to meet its upwardly revised collection target of Rs6.1 trillion.

“I also expect that the smuggling of these [banned] products will increase significantly over the coming few months,” warned Wani.

However, JS Global, the Lahore-based broking and investment banking firm, expect positive results from the import slash. According to a report by the firm, released last week, a ban on the over three dozen items will help save approximately $100 million per month, an impact that will become more clear over time.

A report released by the Insight Securities, also last week, called the steps “directionally right” but added that the government had chosen the “easiest way” to tackle pressure on foreign exchange reserves.

This measure is a “temporary patch and much-needed reforms are required”, suggested the company in its report, explaining that the ruling party should instead make tough decisions, such as reversing the petroleum and electricity subsidies to bring the International Monetary Fund (IMF) on board.

As per estimates, by ending the subsidies on fuel, announced by the previous government, the new finance minister can win a $1 billion tranche from the IMF.

However, it remains to be seen how the Fund will view these band-aid measures by Prime Minister Shehbaz Sharif, as it was previously agreed with Pakistan that during the period of the IMF programme Pakistan will not impose or intensify restrictions on the making of payments and transfers for international transactions or modify multiple currency practices, or impose import restrictions for balance of payments purposes.

geo.tv

 

[MenInG]

KARACHI: The Federal Board of Revenue (FBR) on Wednesday took notice of the seizing of 'luxury goods' in small quantities from the luggage of the passengers arriving at the country's airports, and issued fresh directives in this regard.

In a statement sent to Chief Collectors of Customs Islamabad, Karachi, Peshawar, Quetta and Lahore, the authority said that the government had released a list of luxury items under SRO No 598, banning them until further orders.

However, it has come to the knowledge of the board that the field formations, especially the relevant officials have started to seize items in small quantities, even edible items, causing inconvenience to the travellers, it added.

The FBR directed the authorities to seize only the commercial quantities of the said items and facilitate the passengers as per the earlier practice in this regard.

The communique made it clear that any violation of the fresh directives will lead to punitive steps against those responsible.

A day earlier, it was reported that the Pakistan Customs had started seizing luxury goods from the travellers arriving at the country's airports. The items include chocolates, used mobile phones, branded shoes and those related to sanitary ware.

According to some passengers, they had brought the items for their families and children on a non-commercial basis.

On the contrary, Customs officials had said that they started taking the action in light of the federal government's directives.

On May 19, the federal cabinet banned import of around 41 items for two months to forestall a looming default to support the balance of payments position. The prohibition will not apply to the imports in rupees or through barter mechanism by land routes.

The prohibition may be reviewed after two months, the federal cabinet had decided.

Express Tribune

 

[IAJ]

I am travelling to Pakistan in summer with family in sha Allah, but I have started getting messages from friends and families to avoid taking gifts to family members in Pakistan as they will be seized by the officials at airport (just like the above article is mentioning). Is this for real?@MenInG

 

[MenInG]

Finance Minister Miftah Ismail on Sunday stated that the government has not issued a ban on any industrial raw material; the ban only extends to luxury and non-essential goods.

The finance minister took to his official Twitter account to clarify claims made by a citizen that the import bans include raw materials used to make sanitary pads.

“One of the two companies producing these pads (that account for 84% of sanitary napkins produced locally) has warned they may eventually have to shut down without the raw materials needed to make the pads,” wrote the social media user.

In a series of sub-tweets, the citizen voiced concern over the danger to women’s reproductive healthcare.

“I don’t know if @PMLNHealthCare and [MENTION=2177]maryam[/MENTION]NSharif realise this, but the majority of girls/women in this country use pads. One of the 2 biggest suppliers of pads in this country shutting down will be a healthcare AND economic crisis,” she wrote adding that women resorting to the use of rags is unsafe, unsanitary and keeps women at home.

Read FBR takes notice of seizing ‘luxury items’ from travellers at airports

Taking notice of the issue, Shaza Fatima Khawaja, Member of the National Assembly, responded to the claims, “Hey! I’m looking into this.”

The MNA allegedly took the matter up with finance minister who clarified that there was no ban on imports of raw materials. The minister furthered, “there is certainly no ban on sanitary pads or diapers (or their raw materials), which are obviously essential goods.”

The minister stated that the government will issue further clarification on the import ban, which has been subject to controversy.

On May 18, Prime Minister Shehbaz Sharif gave the go-ahead to a temporary ban on the imports of around three-dozen goods -- essential and luxury items -- but refused to slap regulatory duties to curb imports.

As a result, representatives of the different importers, distributors and retailer organisations expressed concern over the ban on imports and called on the government to introduce a fuel management plan, which can save $240 million per annum.

The ban also prompted protests from pet owners, retailers, veterinarians and importers against the ban on import of pet food, and asked the chief justice of Pakistan to take notice of the situation.

Subsequently, on Saturday the federal government revoked the import ban on certain items including pet food and energy savers, the Ministry of Commerce said.

Express Tribune

 

[MenInG]

ISLAMABAD: A list of 200 officials/officers from the Ministry of Religious Affairs and Interfaith Harmony has been finalised by the Government of Pakistan for the upcoming Haj.

Only from the minister's office, a total list of 35 members has been prepared including five drivers, four gunmen, one cook and 11 personal secretaries and assistants. The minister himself will also be performing Haj this year.

The list available with this scribe says that the authority has finalised this list so that they provide their services to the pilgrims and ensure their utmost welfare while performing Haj. When contacted, Secretary Ministry of Religious Affairs and Interfaith Harmony, Aftab Akber Durrani, said, "The staff of the ministry goes every year. Staff like drivers and gunmen are tagged along for help in works such as carrying luggage, etc."

"We are given a proportion which we can take along every year from the ministries staff for Haj", explained Durrani. The list further includes staff members of secretaries, deputy secretaries, joint secretaries, directors, deputy directors and assistant directors.

In this list of 200 people, there are a total of 16 drivers, over 20 people are identified as security guards/ gunmen/ chowkidars and there are three stenotypists also mentioned in the list. Apart from this, cooks, tubewell workers and pump operators are also included in the list which will be going to ensure safety of the pilgrims going to Saudi Arabia as mentioned in the document available with this scribe.

Directors, assistant directors, deputy directors and Director Generals of different wings and departments of the ministry along with their staff members will also be performing Haj and are part of the list.

The list, in addition, mentions over 22 people as upper division clerks and lower division clerks who are expected to perform Haj this year. Further, district educational officers, district cooperative officers, assistant audit officers and district medical officers are also expected to be accompanying pilgrims as reflected in the list.

The Shehbaz government announced the Haj-2022package, putting the expenses during the holy journey to more than Rs850,000. While the government would provide a subsidy of Rs150,000 to help the intending pilgrims. Religious Affairs Minister Mufti Abdul Shakoor told a press conference that the federal cabinet had approved support amount of Rs150,000 for pilgrims, after which the total cost of the Haj package would come down to just over Rs700,000.

Considering 0.85 million rupees as cost of Haj for one person, the total amount for 200 people is estimated around 170 million rupees, which the Government of Pakistan will pay from public exchequer.

https://www.thenews.com.pk/print/963804-200-officials-to-perform-haj

 

[Vatta]

Absolutely tone deaf. Absolutely unnecessary.

Not to mention, against the principles of Haj.

 

[Bewal Express]

ISLAMABAD: A list of 200 officials/officers from the Ministry of Religious Affairs and Interfaith Harmony has been finalised by the Government of Pakistan for the upcoming Haj.

Only from the minister's office, a total list of 35 members has been prepared including five drivers, four gunmen, one cook and 11 personal secretaries and assistants. The minister himself will also be performing Haj this year.

The list available with this scribe says that the authority has finalised this list so that they provide their services to the pilgrims and ensure their utmost welfare while performing Haj. When contacted, Secretary Ministry of Religious Affairs and Interfaith Harmony, Aftab Akber Durrani, said, "The staff of the ministry goes every year. Staff like drivers and gunmen are tagged along for help in works such as carrying luggage, etc."

"We are given a proportion which we can take along every year from the ministries staff for Haj", explained Durrani. The list further includes staff members of secretaries, deputy secretaries, joint secretaries, directors, deputy directors and assistant directors.

In this list of 200 people, there are a total of 16 drivers, over 20 people are identified as security guards/ gunmen/ chowkidars and there are three stenotypists also mentioned in the list. Apart from this, cooks, tubewell workers and pump operators are also included in the list which will be going to ensure safety of the pilgrims going to Saudi Arabia as mentioned in the document available with this scribe.

Directors, assistant directors, deputy directors and Director Generals of different wings and departments of the ministry along with their staff members will also be performing Haj and are part of the list.

The list, in addition, mentions over 22 people as upper division clerks and lower division clerks who are expected to perform Haj this year. Further, district educational officers, district cooperative officers, assistant audit officers and district medical officers are also expected to be accompanying pilgrims as reflected in the list.

The Shehbaz government announced the Haj-2022package, putting the expenses during the holy journey to more than Rs850,000. While the government would provide a subsidy of Rs150,000 to help the intending pilgrims. Religious Affairs Minister Mufti Abdul Shakoor told a press conference that the federal cabinet had approved support amount of Rs150,000 for pilgrims, after which the total cost of the Haj package would come down to just over Rs700,000.

Considering 0.85 million rupees as cost of Haj for one person, the total amount for 200 people is estimated around 170 million rupees, which the Government of Pakistan will pay from public exchequer.

https://www.thenews.com.pk/print/963804-200-officials-to-perform-haj

200 going on Sarkari Hajj. You can't make it up

 

[MenInG]

The government is set to begin removing restrictions on the import of “non-essential and luxury items” imposed on Feb 19 and provide energy at subsidised rates — electricity at nine cents per unit and gas at $9 per unit — throughout the current fiscal year to make the country’s exports competitive.

Sources told Dawn that a special virtual meeting of the Economic Coordination Commi*ttee (ECC) had been scheduled for Sunday to approve the subsidised energy rates, but was then postponed at the last moment for a day to be merged with another huddle on Monday with important items on the table.

Spoiler

The sources said the government expected about $3 billion inflows from “some friends” during the current week and wanted to give a “confidence and feel-good sense to the market” by supporting five export-oriented sectors and simultaneously clearing import payables and gradually easing restrictions on most imports (except mobile phones and automobiles) imposed on about 85 items for a temporary period.

In consultation with energy and finance ministries and the export sectors, the commerce ministry has sought the supply of electricity at a final, all-inclusive rate of nine cents per unit (kilowatt-hour, or kWh) to five export-oriented sectors — jute, leather, carpet, surgical and sports goods — from July 1, 2022, to June 30, 2023.

Secondly, the imported and regasified liquefied natural gas (RLNG) would be provided to these sectors at an all-inclusive rate of $9 per unit (million British thermal units, or mmBtu) instead of $6.5 at present. The rate will be applicable across Pakistan without any disparity.

As such, RLNG would be provided to consumers of Karachi-based Sui Southern Gas Company Limited (SSGCL) on the same concessionary tariff as that for Lahore-based Sui Northern Gas Pipelines Limited (SNGPL) consumers of five export sectors.

At present, there is a restriction on new industrial connections due to a shortage of natural gas. The government has already allocated Rs60bn for these subsidised rates — Rs20bn for electricity and Rs40bn for RLNG — in the federal budget for 2022-23 to supply energy at concessionary tariff to these sectors.

The finance ministry would give a financial commitment that additional funds, if required by power and petroleum divisions because of higher international prices, would be provided to continue the supply of energy to the export sector at unchanged rates.

It has, nevertheless, emphasised that additional subsidy was not permissible under the IMF programme and the energy divisions should seek timely adjustments in rates to stay within the allocations.

At a higher level, it was decided that power and petroleum divisions would be required to alert the finance ministry in advance and move a formal summary for a supplementary grant from the ECC in a timely manner.

The case for fixed energy prices comes before the ECC as a formality for approval following a decision taken in principle by Prime Minister Shehbaz Sharif at a meeting attended by ministers for finance, commerce, power, petroleum and representatives of the textile industry.

It has been accepted at the policy level that regionally competitive rates had provided a launching pad to exports, which jumped 26pc year-on-year to $32bn in the previous fiscal year. Therefore, fixed rates for the current year and regionally competitive rates throughout the 2020-25 Textile and Apparel Policy would be ensured to maintain the export momentum.

While reviewing the issues of regionally competitive tariffs and the availability of power, gas and RLNG, the meeting had decided that keeping in view the expensive energy imports, textile sector’s proposals and available budgetary space, “electricity at nine cents per kWh and RLNG at $9 per mmBtu all-inclusive will be provided to export-oriented sectors”.

It was, however, reported that only 50 million cubic feet per day of gas would be supplied to captive power plants of export-oriented sectors on the SNGPL network till the time supply-related issues arising out of tough international markets get settled.

The textile industry agreed that its captive power plants in Punjab using local gas primarily for power generation would be shifted to the national grid.

However, it would be important for the gas and power companies to ensure uninterrupted supply and reliability of grid electricity and sort out issues of new connections, load enhancement and transmission and distribution in the first place.

The ban on the import of mobile phones and automobiles would, however, remain in place for the time being because of their big foreign exchange impact. Most other items had lower foreign exchange costs and larger value addition and employment impact, the sources said.

These sources, however, explained that expensive phones and automobiles already in the import process at the time of the ban had already been given relief last week by allowing their clearance from the port at 5pc surcharge after their arrival within two weeks since May 19 and at 15pc surcharge for items that arrived two weeks after the ban and before June 30.

Relevant statutory regulatory orders (SROs) were issued on July 22 to exempt timber/wood import from the ban and clear shipments arrived at ports, including mostly automobile items with 5pc and 15pc surcharge.

The sources said the ECC would also take up for formal approval and implementation a federal cabinet decision taken in February to amend the Imports and Exports Control Act 1950 to change the words “federal government” with the “minister in charge” to allow one-time permission for import, export or re-export on a case-to-case basis.

The government had imposed a complete ban on the import of 30 categories involving about 85 customs headings, including automobiles, mobile phones, home appliances, fruits and dry fruits (except Afghanistan), crockery, private weapons and ammunition, shoes, chandeliers and lighting (except energy savers), headphones and loudspeakers.

Other heads include sauces, doors and window frames, travel bags and suitcases, sanitary ware, fish and frozen fish, carpets (except Afghanistan), preserved fruits, tissue paper, furniture, shampoos, confectionery, luxury mattresses and sleeping bags, jams and jelly, cornflakes, toiletries, heaters, blowers, sunglasses, kitchenware, aerated water, frozen meat, juices, pasta, ice cream, cigarettes, shaving goods, luxury leather apparel, musical instruments, salon items like hair dryers, etc., and chocolates.

Published in Dawn, July 25th, 2022

 

[daytrader]

Import ban on luxury items lifted

ISLAMABAD: The government has increased dealers’ commission on the sale of petroleum products by up to an unprecedented 70 per cent and lifted a ban imposed in May on the import of “non-essential and luxury items”, excluding automobiles, cell phones and electronics.

The decisions were taken on Thursday at a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Finance Minister Miftah Ismail.

The committee also approved tenders for 200,000 tonnes of wheat at about $408 a tonne and allowed $11.6 million goodwill compensation for the Chinese casualities at the Dasu hydropower project in July last year.

The meeting approved an increase of 70pc in the dealers’ commission on the sale of high-speed diesel (HSD) to Rs7 per litre from Rs4.13 at present.

Automobiles, cell phones and electronics excluded; petroleum dealers’ commission raised 70pc

Likewise, it also increased the dealers’ commission on the sale of petrol by 43pc to Rs7 instead of Rs4.90 per litre at present.

This is the steepest increase in margins allowed in one go in the country. The meeting was informed that dealers’ margin on the sale of HSD and petrol was also increased by more than 25pc with effect from December 2021. Put together, the commission has jumped 79pc and 112pc on petrol and HSD since then.

The increase was approved based on an agreement reached with dealers in 2018 by former prime minister Shahid Khaqan Abbasi and Minister of State for Petroleum Musadik Malik, who held the same post at the time.

The meeting was told that dealers had threatened to go on strike and demanded about Rs14 per litre commission on both products, but it was brought down to Rs7.

The ECC was told that oil marketing companies (OMCs) had demanded an increase in their margins to Rs7 per litre from the existing Rs3.68 on both products but this would be taken up separately so that benefit was given to dealers with effect from Aug 1 and OMCs on Sept 1 to increase prices in phases.

Import ban

The ECC also lifted the ban on imported goods except for completed built units (CBUs) of automobiles, mobile phones and home appliances.

The meeting was told the ban had helped cut the imports of banned items, which shrank by around 70pc from $399.4 million to $123.9 million between May 20 and July 19.

The major contributors to this reduction of about $275m were automobile and mobile phone CBUs, which had a share of 79pc in the total import reduction. The remaining 21pc reduction was spread over 810 tariff lines impacting multiple sectors of the economy, including foreign investments.

The ECC also decided that all held-up consignments (except items which still remain in the banned category) which arrived at the ports after July 1 should be cleared subject to payment of a 25pc surcharge.

Wheat import

The Ministry of National Food Security and Research submitted a summary on urgent advice relating to the award of the fourth International Wheat Tender 2022 opened on July 25.

The tender was opened on July 25, in which six international suppliers participated, out of which five offered bid rates. The ECC approved the lowest bid offered by Falconbridge FZ LLC at the rate of $407.49 per tonne CFR bulk on a sight-letter-of-credit basis.

The ECC also approved domestic gas supply to Fatima Fertiliser’s Sheikhupura plant and Agritech and advised the TCP to negotiate wheat imports from Russia at lower rates.

DAWN

 

[MenInG]

Finance Minister Miftah Ismail announced on Thursday that the government was lifting the ban on the import of non-essential and luxury items.

Addressing a press conference in Islamabad, he said that if the government had a limited amount of dollars and its foremost priority was to provide basic necessities to the country’s population, then its choice was very simple.

“Do we buy cars or grain with those dollars? Do we buy mobile phones or pulses? Do we buy oil and ghee or home appliances? Our choice becomes very simple.”

Therefore, the government had imposed a ban on the import of non-essential items, the minister said. “However, because it is a requirement of the international community that a ban is not imposed, we are removing it on all items.”

DAWN

 

[daytrader]

Ex-military officers allowed import of tax-free bulletproof vehicles

ISLAMABAD: Retired three- and four-star officers of the armed forces will be able to import duty-free bulletproof vehicles of up to 6,000cc under a policy green-lighted by the federal cabinet, but is subject to approval from the premier, an official source told Dawn.

The facility will also be available to all three services chiefs and the chairman of the Joint Chiefs of Staff Committee soon after their retirement, the official said but added that a notification had yet to be released.

Whether the facility will be subject to any condition or will it apply to only retired offers remains to be seen. “We cannot share details right now,” the source said, adding that things would be clear once the notification was issued.

The Federal Board of Revenue (FBR) has delayed releasing the notification after growing criticism on social media over the government’s decision. The notification will now be issued after approval from Prime Minister Secretariat and the finance minister, the source said.

As per the federal cabinet’s in-principle decision, four-star armed forces officers can import two bulletproof vehicles with engine capacity of up to 6,000cc duty-free. Three-star officers will be able to import one duty-free bulletproof vehicle after retirement.

They would not be able to sell these vehicles in the market for five years and without FBR’s approval. But if they want to sell a vehicle before that period, they will need to pay all duties and taxes. Moreover, the import of these vehicles will be linked with the defence ministry’s recommendation.

A well-placed source in the FBR told Dawn the decision was taken with approval from the federal cabinet, which has the authority to waive duty and taxes on anything.

Another source claimed that the decision to allow duty-free bulletproof vehicles was earlier taken by the cabinet in 2019. However, he did not elaborate on why the decision was not implemented even after three years.

The decision was originally taken to allow the facility only to those officers who served in major operations and have security issues after their retirement, the source said, adding the facility was not open to all three-star officers of the armed forces.

A finance ministry official said the IMF would have no issue with the individual’s exemptions. “We have recently revived the exemptions of international organisations as well as diplomats,” the official said.

In 2020, the commerce ministry notified a policy for importing new and used bulletproof vehicles through a notification SRO902 of 2020.

Under that policy, bulletproof vehicles can be imported on the interior ministry’s recommendation, subject to conditions. However, in the present case, the exemption from duty and taxes will be an additional benefit.

DAWN

 

[daytrader]

GOVT HIKES GST ON MORE LUXURY ITEMS TO WOO IMF

Prime Minister Shehbaz Sharif-led federal cabinet on Tuesday approved the imposition of 25 per cent sales tax on luxury items, fulfilling another condition set by the International Monetary Fund (IMF) for the revival $7 billion Extended Fund Facility (EFF) stalled for months, ARY News reported quoting sources.

The cabinet approved 25pc general sales tax (GST) on luxury items through a circulation summary. The formal notification will be issued by the Federal Board of Revenue in the coming days,

The summary approval was taken from the circulation for the notification of 25 pc ST from the federal cabinet. Now the Federal Board of Revenue (FBR) will issue a notification and the new rate will be applicable from March 1.

The items on which 25pc GST was imposed included aerated water and juices, imported cars, mobile phones, cat and dog food, sanitary and bathroom wares, carpets (excluding Afghanistan), chandeliers and lighting devices or equipment, chocolates, cigarettes, confectionary items, corn flakes etc, cosmetics, shaving items, tissue papers, crockery, decoration/ornamental devices, doors and window frames, fish, footwear, fruits and dry fruits, furniture, homes appliances (CBU), luxury leather jackets and apparels, mattress and sleeping bags, frozen or processed meat, mobile phone (CBU), musical instruments, arms and ammunition, shampoos, sun glasses, tomato ketchup and sauces, travelling bags and suitcases.

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https://arynews.tv/govt-hikes-gst-on-more-luxury-items-to-woo-imf/

 

[daytrader]

SBP ABOLISHES CASH MARGIN REQUIREMENT ON IMPORTED ITEMS

The State Bank of Pakistan (SBP) on Friday abolished the dollar cash margin requirement on imports from March 31, ARY News reported.

Experts claimed that the government fulfilled another condition of the International Monetary Fund (IMF) by ending the dollar cash margin requirement on imports.

It is pertinent to mention here that the government imposed a cash margin requirement in August 2022 to limit imports of luxury and non-essential goods to deal with the country’s financial crisis.

The SBP has issued a notification to all financial institutions instructed to put an end to the dollar cash margin requirement on imports.

According to experts, a cash margin is a form of security to eliminate the risk of non-payment, adding that the cash margin imposed on imports has been withdrawn on IMF directives.

ARY