Latest news with #AdditionalCustomsDuty
Business Recorder
3 days ago
- Business
- Business Recorder
Sindh farmers ask FBR to reduce duty on tractors
ISLAMABAD: Small farmers from Sindh have approached Federal Board of Revenue (FBR) to reduce custom duty on imported tractors from 15 percent to 5 percent under massive tariff rationalisation plan to be implemented in budget (2025-26) to support agriculture sector. Farmers have also proposed FBR Chairman Rashid Mahmood to reduce the existing sales tax rate on locally manufactured and imported tractors from 14 percent to 5 percent, enabling the farmers to purchase tractors. This is not an exemption, but only a reduced rate already applicable of many items including vehicles under Sales Tax Act. The budget proposals of the Sindh Chamber of Agriculture (SCA) Hyderabad to FBR Chairman included rationalisation of tax structure and abolishment of levy of sales tax on tractors to support agriculture sector. Sales tax on tractors, pesticides likely When contacted, sources in the FBR revealed that the proposals are under consideration of the FBR during ongoing budget preparation exercise to facilitate poor farmers of the country. The chamber stated that the approved tariff plan to be implemented in budget (2025-26) covers elimination of Additional Customs Duty (ACD); phasing out of Regulatory Duty (RD); gradual elimination of the Fifth Schedule of the Customs Act and restructuring of the customs tariff. This must cover most essential item i.e. tractor which is not a luxury item like vehicle. Nabi Bux Sathio, Senior Vice President, Sindh Chamber of Agriculture Hyderabad stated: 'We, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists in recent times'. The chamber stated that the agricultural sector plays a pivotal role in Pakistan's economy, contributing 24% to the GDP and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling availability of water, exacerbating the challenges faced by farmers and agriculturists. Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The government's announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community. He urged the FBR to reduce the existing sales tax rate on locally manufactured and imported tractors from 14% to 5% enabling the farmers to purchase tractors, and also reduce the custom duty on imported tractors from 15% to 5% and also for re-conditional tractors. Copyright Business Recorder, 2025
Express Tribune
7 days ago
- Business
- Express Tribune
Coffee sector for duty cuts
Listen to article Stakeholders in Pakistan's growing coffee sector are urging the government to eliminate the 28% combined Regulatory Duty (RD) and Additional Customs Duty (ACD) on bulk instant coffee imports, arguing the current levy is stifling industry growth and preventing the development of a domestic coffee market. The duties were imposed in June 2021 under SRO 840(I)/2021 and currently include a 15% RD and 2% ACD, with other charges making up the rest. Industry sources point to the disparity between coffee and tea imports, which face only a 13% duty. They also note that the tariff on raw instant coffee is disproportionately high compared to finished coffee products, which attract duties between 42% and 53%. According to industry representatives, this duty regime contradicts Pakistan's National Tariff Policy, which emphasises policy predictability, value addition, and industrial efficiency. They argue that eliminating the duties would significantly lower the landed cost of bulk instant coffee, making local manufacturing more feasible and encouraging investment in domestic processing, blending, and packaging facilities. With rising demand for coffee — driven by remote work trends and a flourishing café culture — stakeholders believe that lower raw material costs would also help bring down consumer prices and make coffee more accessible across homes and offices nationwide. They add that reducing duties would streamline the coffee supply chain, cut administrative costs, and offer consumers a wider variety of products at more competitive prices. Industry players see strong potential in exports, saying local producers could create value-added instant coffee and ready-to-drink beverages for international markets.
Business Recorder
21-05-2025
- Business
- Business Recorder
New tariff policy seen as disaster for manufacturers in Pakistan
ISLAMABAD: The government's new national tariff policy has put domestic industry in serious trouble, with many stakeholders warning that the move could be disastrous for local manufacturing. This concern emerged during a consultative meeting between representatives of local industry and the Ministry of Industries and Production (MoI&P), following a letter issued by the Engineering Development Board (EDB) on May 17, 2025. A copy of the letter is available with Business Recorder. In the letter, the EDB informed industry stakeholders of a significant shift in the country's tariff policy under the National Tariff Policy 2025–30. The letter, widely circulated among stakeholders including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), all provincial chambers, industrial associations, exporters, and manufacturing groups, was aimed at alerting the sector about the far-reaching implications of the new policy. National Tariff Policy: govt approves phased elimination of import duties According to the letter, the government intends to substantially reduce import duties as part of an export-led growth strategy, with implementation to begin in the federal budget for 2025–26 and continue over five years. The policy formulated under the direct instructions of the Prime Minister includes: (i) elimination of Additional Customs Duty (ACD) over four years starting FY2025–26; (ii) phasing out of Regulatory Duty (RD) over five years; (iii) gradual elimination of the Fifth Schedule of the Customs Act, which covers imports of capital goods and raw materials; (iv) restructuring of the customs tariff into four slabs: zero percent, five percent, 10 percent, and 15 percent; and (v) capping of maximum customs duty at 15 percent. Currently, there are five duty slabs: zero percent, three percent, 11 percent, 16 percent, and 20 percent. The three percent slab will be removed, shifting those tariff lines to either zero percent or five percent. The 11 percent slab will be lowered to 10 percent, and the 16 percent slab to 15 percent, while the 20 percent slab will be gradually eliminated. A follow-up meeting held on May 19, 2025, was attended by a large number of stakeholders via Zoom—so many, in fact, that some were unable to join due to platform limitations. Participants across sectors voiced strong opposition to the proposals. FPCCI representatives stated that they had already submitted comprehensive budget proposals after an extensive consultative process with members. Auto vendors and OEMs noted that the EDB had been consulting them for the past six months as part of the budget-making process. Industry representatives expressed shock that such a drastic policy shift was being introduced at a late stage in the budget cycle—particularly after consensus had already been achieved with the IMF, and a future tariff roadmap was near finalization by the Tariff Policy Board in coordination with the Ministry of Commerce and the Ministry of Industries and Production. 'Stakeholders expressed deep concern, warning that this move could spell disaster for the domestic industry,' said one participant. 'With finished goods facing only a 15 percent maximum tariff, what incentive is left to produce locally? This policy risks are turning Pakistan into a mere trading hub.' Interestingly, the EDB did not explicitly endorse the proposed policy during the meeting. In response to stakeholders' objections, the CEO of EDB repeatedly stated, 'Please send your comments, observations, and suggestions in writing—we will take them up at the relevant forum.' Insiders believe there is a significant divergence of views within the government on tariff reform, and that these disagreements are now playing out in public forums. Copyright Business Recorder, 2025
Business Recorder
21-05-2025
- Business
- Business Recorder
LCCI opposes proposed changes under National Tariff Policy
LAHORE: President of Lahore Chamber of Commerce and Industry Mian Abuzar Shad has strongly opposed the proposed changes under the draft National Tariff Policy 2025–30 presented by the Engineering Development Board. Terming the measures as 'anti-industry,' the LCCI president warned that the new policy could have serious repercussions for Pakistan's industrial base, trade balance and economic sovereignty. The LCCI president said that while reforming the tariff regime is important, the current proposal is likely to increase Pakistan's reliance on imports, shifting the country further away from a manufacturing-driven economy. He said that by substantially lowering import duties and eliminating Additional Customs Duty (ACD), Regulatory Duty (RD), the government risks transforming Pakistan into an import-dependent economy. Mian Abuzar Shad further warned that lower tariffs will lead to a surge in imports, thereby putting immense pressure on the current account and foreign exchange reserves, which are already under stress. 'Pakistan cannot afford such a liberalisation at the cost of macroeconomic stability,' he emphasized. The LCCI also criticised the proposed tariff spread of 0% to 15% as too narrow to reflect the developmental needs of a diverse industrial landscape. 'Even globally competitive and specialized economies such as China maintain a much wider tariff spread to protect sensitive sectors. This narrow spread will blur the line between manufacturers and importers, discouraging local production,' said the LCCI president. The LCCI president also warned that these changes will result in revenue losses for the government while exacerbating the public debt burden. 'The expected drop in customs revenue will need to be compensated through indirect taxation or further borrowing, both of which will hurt the economy.' Pointing to the already high cost of doing business in Pakistan, the LCCI emphasised that this move will further deter industrial growth. 'Our industries are already burdened by high energy tariffs, inefficient labor markets and a complex tax regime. These tariff reductions could lead to shutdowns and job losses,' the president added. The LCCI urged the government to reconsider this premature rationalisation and engage in meaningful consultation with industry stakeholders to develop a tariff structure that supports both industrialisation and exports. Copyright Business Recorder, 2025
Business Recorder
21-05-2025
- Business
- Business Recorder
New tariff policy seen as disaster for manufacturers
ISLAMABAD: The government's new national tariff policy has put domestic industry in serious trouble, with many stakeholders warning that the move could be disastrous for local manufacturing. This concern emerged during a consultative meeting between representatives of local industry and the Ministry of Industries and Production (MoI&P), following a letter issued by the Engineering Development Board (EDB) on May 17, 2025. A copy of the letter is available with Business Recorder. In the letter, the EDB informed industry stakeholders of a significant shift in the country's tariff policy under the National Tariff Policy 2025–30. The letter, widely circulated among stakeholders including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), all provincial chambers, industrial associations, exporters, and manufacturing groups, was aimed at alerting the sector about the far-reaching implications of the new policy. National Tariff Policy: govt approves phased elimination of import duties According to the letter, the government intends to substantially reduce import duties as part of an export-led growth strategy, with implementation to begin in the federal budget for 2025–26 and continue over five years. The policy formulated under the direct instructions of the Prime Minister includes: (i) elimination of Additional Customs Duty (ACD) over four years starting FY2025–26; (ii) phasing out of Regulatory Duty (RD) over five years; (iii) gradual elimination of the Fifth Schedule of the Customs Act, which covers imports of capital goods and raw materials; (iv) restructuring of the customs tariff into four slabs: zero percent, five percent, 10 percent, and 15 percent; and (v) capping of maximum customs duty at 15 percent. Currently, there are five duty slabs: zero percent, three percent, 11 percent, 16 percent, and 20 percent. The three percent slab will be removed, shifting those tariff lines to either zero percent or five percent. The 11 percent slab will be lowered to 10 percent, and the 16 percent slab to 15 percent, while the 20 percent slab will be gradually eliminated. A follow-up meeting held on May 19, 2025, was attended by a large number of stakeholders via Zoom—so many, in fact, that some were unable to join due to platform limitations. Participants across sectors voiced strong opposition to the proposals. FPCCI representatives stated that they had already submitted comprehensive budget proposals after an extensive consultative process with members. Auto vendors and OEMs noted that the EDB had been consulting them for the past six months as part of the budget-making process. Industry representatives expressed shock that such a drastic policy shift was being introduced at a late stage in the budget cycle—particularly after consensus had already been achieved with the IMF, and a future tariff roadmap was near finalization by the Tariff Policy Board in coordination with the Ministry of Commerce and the Ministry of Industries and Production. 'Stakeholders expressed deep concern, warning that this move could spell disaster for the domestic industry,' said one participant. 'With finished goods facing only a 15 percent maximum tariff, what incentive is left to produce locally? This policy risks are turning Pakistan into a mere trading hub.' Interestingly, the EDB did not explicitly endorse the proposed policy during the meeting. In response to stakeholders' objections, the CEO of EDB repeatedly stated, 'Please send your comments, observations, and suggestions in writing—we will take them up at the relevant forum.' Insiders believe there is a significant divergence of views within the government on tariff reform, and that these disagreements are now playing out in public forums. Copyright Business Recorder, 2025
