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Express Tribune
28-05-2025
- Business
- Express Tribune
Ceramic tiles industry demands more protection
Listen to article Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan held a meeting with the All Pakistan Ceramic Tiles Manufacturers Association, which was attended by representatives from 10 leading Pakistani manufacturers and four Chinese firms, who discussed opportunities for collaboration and growth. Key issues that came up for discussion included tariff policy, customs duty, export and import regulations and the need for tariff protection, said a statement issued by the Ministry of Industries. While appreciating the vital role of the ceramic tiles industry in industrial development, Khan stressed that he was fully aware of the challenges faced by them and would advocate for their cause. He told them to submit a detailed report outlining the specific reasons as to why heightened tariff protection was essential for the industry. The PM aide announced the formation of a joint committee comprising members of the tiles manufacturers association and officials of the Engineering Development Board. The committee will present a progress report by Thursday. "The administration under Prime Minister Shehbaz Sharif remains committed to supporting and revitalising Pakistan's industrial sector. We are actively advocating for industries at the National Tariff Policy Board to ensure their concerns are addressed," he remarked. He reiterated his vision to see Pakistani manufacturers become regionally competitive, adding that no industry would be allowed to shut down. "Revival of industries is our vision and we are formulating long-term policies to ensure sustainable growth." In a separate meeting with Federal Minister for Finance Muhammad Aurangzeb, a delegation of the All Pakistan Ceramic Tiles Manufacturers Association, led by Orient Ceramica Executive Director Abdul Rehman Talat, shared that the current installed tiles manufacturing capacity in Pakistan stood at 560,000 square metres per day, backed by an investment of over Rs100 billion, of which nearly 60% came from China.
Express Tribune
26-05-2025
- Business
- Express Tribune
'Open trade may hurt key sectors'
The Ministry of Industries has cautioned the federal government that its aggressive trade liberalisation plan may hurt at least 15 major job-creating sectors, urging phased implementation that excludes imported finished goods in the initial stage. The warning came the day Prime Minister Shehbaz Sharif convened a meeting of the National Economic Council (NEC) on June 9 to approve development and macroeconomic targets for the next fiscal year, just a day ahead of the federal budget announcement. The timing may challenge the planning ministry's ability to publish relevant documents based on NEC decisions just hours before the budget is presented. According to sources, during a recent meeting of the steering committee overseeing the implementation of the new National Tariff Policy, multiple ministries advised against fully opening the economy to foreign competition in the upcoming fiscal year. Finance Minister Muhammad Aurangzeb chaired the meeting, although no official statement was issued afterward. The government plans to significantly reduce import duties starting next fiscal year as part of its broader trade liberalisation agenda. However, domestic industries have expressed reservations, prompting the prime minister to form a steering committee under Aurangzeb to review the potential fallout. Sources said the Ministry of Industries urged the steering committee on Monday to reconsider the decision, recommending a gradual reduction in tariffs that starts with raw materials and intermediate goods rather than finished products. The finance minister, however, stated that such decisions fell outside the steering committee's purview and should be raised directly with the prime minister. Some members disagreed, arguing that assessing the impact on vulnerable industries was well within the committee's mandate. Under the current plan, customs duty slabs will be reduced to four levels: 0%, 5%, 10%, and 15%, down from the existing five-tier system that tops out at 20%. The Ministry of Industries informed the committee that most industries fear the new policy may force closures. It identified at least 15 sectors likely to be adversely affected, including chemicals, polyester, iron and steel, automobiles, and ceramicsall of which are major job generators. There are also concerns that a sudden opening of the economy could lead to a surge in imports, triggering a balance of payments crisis. The country's foreign exchange reserves are already under pressure, with the rupee's value slipping close to Rs284 against the US dollar. Additionally, difficulties have emerged in opening some letters of credit due to major debt repayments this month. If external account pressure increases, the government may be forced to devalue the rupeea move in line with recommendations from the International Monetary Fund (IMF). The Ministry of Commerce had initially proposed a six-tier duty structure0%, 3%, 6%, 9%, 12%, and 20%but the prime minister did not agree. During the steering committee meeting, some members advocated for duty reductions on raw materials and intermediate goods first, cautioning against cutting tariffs on finished goods too soon. However, liberalisation proponents argued that deferring reductions on finished goods would make them harder to implement later during the five-year rollout. The steering committee ultimately decided to revise the duty reduction plan by initially lowering tariffs on raw materials and intermediate goods only. A key point of contention was whether the estimated Rs200 billion in lost duties should be distributed across all duty slabs, including additional customs and regulatory duties. While relevant ministries pushed for a prudent rollout plan, private sector representatives called for uniform reductions across the board. As per the government's plan, additional customs duties will be abolished over four years, starting with the upcoming budget, while regulatory duties will be phased out over five years. The Fifth Schedule of the Customs Actcovering imports of capital goods and industrial raw materialswill also be scrapped in five years. One technical debate centered on why the duty on Purified Terephthalic Acid (PTA), a raw material used to produce other raw materials, was excluded from the reduction plan, even though a duty reduction for Polyester Staple Fiber, which is derived from PTA, was included. New plan Meanwhile, Prime Minister Shehbaz Sharif has convened the NEC meeting on June 9 to approve the Annual Development Plan and set macroeconomic targets for FY2025-26. The NEC, chaired by the prime minister and comprising the four provincial chief ministers, is responsible for approving federal and provincial development plans. Sources said the government plans to set the GDP growth target at 4.2% for the next fiscal year, up from the disputed 2.7% figure for the current year. The initial draft of the new annual plan projects a cautiously optimistic outlook, with agriculture expected to post modest gains and the industrial sector poised for a stronger rebound. This is expected to be driven by improvements in large-scale manufacturing, better energy supply, and stability in the construction sector. The Annual Plan 202526 is aligned with the "URAAN Pakistan" strategy, which aims to boost foreign exchange earnings through higher exports, increased remittances, and greater foreign direct investment. It is based on the export-led 5Es Framework, which prioritises diversification, global competitiveness, import substitution, innovation, Small and Medium sized Enterprises (SMEs) development, and cluster-based industrial growth to reinforce the "Made in Pakistan" brand. With these strategies, Pakistan seeks sustainable growth and greater resilience against external shocks.
Express Tribune
14-05-2025
- Business
- Express Tribune
Govt set to cut import taxes
It's unjust that honest industrialists and salaried professionals bear the brunt of taxation while large sectors – retailers, agriculture, real estate, wholesalers and service providers – escape their fair share. photo: file Listen to article The government has decided to substantially lower import taxes worth Rs120 billion in the upcoming budget aimed at opening the economy to foreign competition amid concerns over the impact of a steep tariff reduction on external financial imbalances. Prime Minister Shehbaz Sharif has this week endorsed the plan of reducing import duties while turning down the objections raised by the Ministry of Industries and the Ministry of Commerce. These ministries expressed concerns over the negative impact of steep but gradual changes on the manufacturing sector and the balance of payments, two members of the cabinet told The Express Tribune. Interestingly, the finance ministry and the Federal Board of Revenue (FBR), which were behind increasing the tariffs in the past to raise revenues, have supported the plan. The first phase of the plan will be implemented in the new budget and will be fully completed in five years, said the sources. While rejecting the commerce ministry's proposal to increase the number of tariff slabs to six from five, the PM decided to reduce the slabs to four under the five-year plan, said the sources. The maximum slab rate will be set at 15% by reducing it from the current 20% over five years. The free trade plan approved by the government is even steeper than the one agreed with the International Monetary Fund (IMF), according to a member of the committee that finalised the plan. Total revenue impact of the plan is Rs512 billion, excluding any changes in tariff rates for oil and gas exploration and production companies, according to the sources. In the first year, the negative revenue implications will be roughly Rs120 billion, including around Rs100 billion due to changes in slab rates. According to the decision, which will be given legal cover in the budget, customs duty slabs will be reduced to four - 0%, 5%, 10% and 20%. Currently, there are five slabs. Some 2,201 goods are imported at zero duty but there is 2% additional customs duty and up to 20% regulatory duty. The government will not change import duties for the automobile sector in the budget. There is a 3% duty slab having 972 items. This slab also carries 2% additional customs duty and up to 35% regulatory duty. It has been decided to abolish the 3% slab and move tariff lines either to zero or 5%. Sources said that there were chances that the majority of those tariff lines would be moved to 5%, which would generate a revenue of about Rs70 billion to offset losses. It has been approved to introduce a new 5% duty slab. The 11% slab will be lowered to 10%. There are 1,121 tariff lines under this slab, which also attracts 2% additional customs duty and up to 50% regulatory duty. There is a possibility the 11% slab will be lowered to 10%. The current fourth slab rate is 16% under which 545 items are traded. This slab also attracts 4% additional customs duty and up to 50% regulatory duty. The slab rate will be reduced to 15% in the budget. The fifth slab has a 20% rate, which will be abolished gradually, said the sources. There are 2,227 goods that can be imported under this slab, which attracts 6% additional customs duty and up to 60% regulatory duty. However, there are concerns that the sudden opening of the economy may put an additional import burden, which can trigger a balance of payments crisis. The finance ministry has estimated that a 1% reduction in duties can increase trade deficit by 1.7%. The commerce ministry had proposed the introduction of six slabs - 0%, 3%, 6%, 9%, 12% and 20% but the PM did not agree. According to the decision, additional customs duties will be abolished in four years, starting from this budget. Regulatory duties will be eliminated in five years. The Fifth Schedule of the Customs Act that deals with imports of capital goods and industrial raw material will be abolished in five years. A senior tax official said that the losses due to reduction in import taxes would be offset through increased tax collection from domestic economic activities. In the first year, the customs duty loss is estimated at Rs15 billion, additional customs duty loss at Rs50 billion, regulatory duty loss at Rs35 billion and the Fifth Schedule-related losses are estimated at about Rs20 billion. As per the decision, the trade-weighted average tariff will come down from 10.62% to 9.57% in the next fiscal year while the trade-weighted average customs duty will come down from 5.68% to 5.54%. Sources said that the PM Office was of the view that high tariffs were pulling down productivity and local companies were not inclined to export. But the Ministry of Commerce officials said that the approved plan was contrary to the cascading principles related to raw material and finished goods. They were of the view that the cost of production may not drastically decrease despite tariff reduction due to the high input cost (energy, labour and productivity). Out of the Rs512 billion revenue losses, nearly Rs300 billion will occur during the IMF's ongoing three-year programme. Some of the government functionaries also urged caution, stressing the need to proceed carefully. But the government decided that in order to boost exports it was important to reduce tariffs on intermediate inputs and capital goods crucial for the export sector.
Express Tribune
08-04-2025
- Business
- Express Tribune
Industries ministry proposes super tax
Listen to article The Ministry of Industries has proposed the introduction of super tax in the upcoming budget for fiscal year 2025-26 to bring Pakistan's corporate tax structure on a par with regional standards. Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan floated the proposal during a high-level meeting on budget proposals. He gave directives for revising budget proposals as there was a need for tax reforms to uplift the industrial sector. In that regard, he proposed the introduction of super tax. Meeting participants discussed various key issues including the promotion of local manufacturing, import and export of raw material and the structure of customs duty, regulatory duty and additional customs duty. The Ministry of Industries proposed the imposition of 20% regulatory duty on LED lighting products. In line with Prime Minister Shehbaz Sharif's vision, the special assistant underscored the importance of creating a business-friendly environment to encourage investment in the industrial sector. He highlighted the need to support local industries and facilitate small and medium-scale enterprises (SMEs). Furthermore, Haroon Akhtar Khan instructed the departments concerned to identify and eliminate obstacles hindering industrial development to ensure sustainable economic growth in the country. The meeting was attended by Ministry of Industries and Production Secretary Saif Anjum, representatives from the Engineering Development Board and the Small and Medium Enterprises Development Authority.
Express Tribune
08-03-2025
- Business
- Express Tribune
Utility Stores wear deserted look as prices soar
The Ministry of Industries requested the ECC that the utility stores may be allowed to sell five subsidised essential items to one family per month with the help of online verification through NADRA. photo: file The absence of a subsidy package for utility stores this Ramazan has left these outlets across the city completely deserted. Hundreds of people who visit daily in hopes of finding affordable essentials return disappointed. Unlike previous years, no subsidies have been provided on sugar, flour, ghee, oil, gram flour, or pulses at utility stores this Ramadan, nor has additional stock been supplied. This has led to frequent altercations between customers and store workers, who themselves have expressed frustration over the situation. Speaking at the Committee Chowk Sunday Bazaar Utility Store, workers lamented that on the second day of Ramazan, they had been sitting idle since morning with no subsidised items in stock. They described the so-called "Ramazan package" as nothing but empty promises, pointing to the empty shelves where sugar, ghee, oil, flour, and pulses should have been. Workers recalled that for the past 50 years, they had sold discounted essentials every Ramadan, but this year, nothing was available at reduced prices. Instead of receiving blessings from fasting citizens and the poor, they said they were now forced to endure their curses. The long queues traditionally seen at utility stores during Ramadan are now a distant memory. Meanwhile, market vendors, rather than embracing the spirit of Ramadan by offering fair prices, have significantly hiked the rates of all essential food items used for Sehri and Iftar. On the second day of Ramazan, sugar is being sold at Rs170 per kilogram, while bananas are priced at Rs300 per dozen. Oranges cost between Rs550 and Rs600 per dozen, apples are Rs450 per kilogram, strawberries are Rs600 per kilogram, guavas are Rs250 per kilogram, pomegranates are Rs400 per kilogram, and grapes range from Rs350 to Rs500 per kilogram. Melons are being sold at Rs250 per kilogram. The price of live chicken has reached Rs550 per kilogram, while chicken meat is being sold at Rs780 per kilogram. A dozen eggs now cost Rs287. Milk is priced at Rs220 per litre, yoghurt at Rs240 per kilogram, butter at Rs1,200 per kilogram, and desi ghee at an astonishing Rs3,000 per kilogram. The cost of mutton has surged to Rs2,400 per kilogram, while beef is being sold at Rs1,400 per kilogram. The price of white chickpeas has reached 410 rupees per kilogram, gram dal is Rs400 per kilogram, mash dal is Rs550 per kilogram, red beans are Rs420 per kilogram, and gram flour is being sold between Rs400 and Rs450 per kilogram. Ghee is being sold at Rs500 rupees per kilogram, and cooking oil has reached 530 per litre. Potatoes are being sold at Rs90 per kilogram, while onions cost 100 per kilogram. A bunch of coriander or mint is priced at Rs30. Garlic has reached Rs800 per kilogram, ginger is being sold at Rs600 per kilogram, and peas cost Rs100 per kilogram. Chinese lemons are priced at Rs200 per kilogram, while radishes are available at Rs50 per kilogram. Sources said with no price regulation in place, further increases in the coming days appear inevitable.
