Islamabad: Pakistan will cut taxes on imports of raw materials to aid manufacturing and economic growth, according to Prime Minister Imran Khan's trade adviser.
Customs duties on input items like pharmaceutical, chemical, engineering and food processing industries will be reduced by 3 per cent to 10 per cent, Abdul Razzak Dawood, Khan's adviser on commerce said. This move will help lower the import of finished goods, encourage local production and put the nation in a position to boost exports, he said.
"Pakistan had ridiculously high duties," said Dawood. “The objective is to put Pakistan on par with other countries on trade taxes.”
The proposal will find mention in the federal government's annual budget for the year starting July 1, by when it targets to achieve a growth rate of 4.8 per cent. The nation forecast growth to be 3.9 per cent this year after a rare contraction last year. The new budget is scheduled to be presented in the lower house of the parliament on June 11.
A major departure
Paring import taxes will be a huge policy shift for Pakistan, given more than 40 per cent of its total tax revenue is generated from levies on inbound shipments. Khan's government is seeking to end the nation's reliance in recent years on foreign loans and bailouts, and instead boost industrial productivity and the share of exports in the economy.