More ‘Duty’ on essential imports

Due to very high inflation in Pakistan, the common man is already suffering as he finds it difficult to make both ends meet. To make things worse, the government has recently imposed a new ‘Regulatory Duty’ on the imports of hundreds of products, without making a clear distinction between the ‘Essential’ and ‘Non-essential’ items and commodities. This decision was taken by the government unilaterally, without taking into consideration the opinion of the stakeholders and the local manufacturing industry.
Besides the numerous food-items, this duty will also cause a sharp rise in retail price of the basic home appliances and electronics that have become a necessity of household living in today’s hectic lifestyle. These electronics provide basic comforts, convenience and information, for the middle and lower segments, to help them perform better and be more productive in today’s competitive professional environment.
In a hasty attempt to discourage ‘Unnecessary’ imports and improve the ‘Balance of Trade’, the government has recklessly imposed this additional ‘Regulatory Duty’ on the spare-parts, components and material being used by the domestic producers and technicians of Electronics, Refrigerators, Televisions and Air-Conditioners too. Thus, it will have a negative impact on the local manufacturing sector. This move absolutely negates the Industrial Policy of the country, as it will disrupt the business operations of many factories in Pakistan, who are making valuable tax-contributions to the national exchequer and providing employment opportunities to millions of citizens.
In this dynamic era of high-productivity and information, these ‘Consumer-Durables’ are not classified as “luxury” items in any progressive country – not even in the rural regions of the world. Hence, it is not fair to include such products in the list of “luxury items”. The revenue authorities have failed to learn any lessons from failure of such measures taken in past, when similar policy-decisions had only encouraged under-invoicing, smuggling and other illegal practices. The government should have acted more strategically and it should have rationalized the items to create a logical distinction between ‘Essential’ and ‘Non-Essential’ items. Whereby it can impose this duty on only the unnecessary imports, where this taxation will be inevitable and harmless.

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