The latest budget presented by the Pakistani government last week aims to reduce the input cost of several industries and bring online transactions under the sales tax net. It offers relief measures in customs duty, sales tax and income tax for the industrial sector amid a proposed plan that explains how the government intends to meet the Rs-1,129 billion hike in the Federal Board of Revenue (FBR) target.
The government has either reduced or exempted completely customs duty, additional customs duty and regulatory duty on imports of 584 tariff lines, including fabric in the value chain of the textile sector. The estimated loss of revenue from this major measure is Rs10 billion.
The tariff policy board has proposed reduction in customs duty and additional customs duty on 328 tariff lines related to raw materials, chemicals and intermediate goods for chemical, engineering and leather industry, etc. as part of its tariff rationalisation plan, according to Pakistani media reports.
Under this, 241 tariff lines are completely exempted from customs duty and additional customs duty, while the same on 87 tariff lines has been reduced to 3 per cent from 16 per cent and 11 per cent respectively.
On 2,436 tariff lines, additional customs duty has been reduced from 7 per cent to 6 per cent. These items are placed under the 20 per cent customs duty slab, which includes garments and footwear.