ECC ups regulatory duty on wheat to 60%

The move aims at protecting farmers at the expense of consumers


Our Correspondent August 30, 2016
The move aims at protecting farmers at the expense of consumers. PHOTO: FILE

ISLAMABAD: To protect interests of growers at the expense of consumers, the government on Monday increased regulatory duty on import of wheat while flouting a Supreme Court of Pakistan judgment that stopped it from taking fiscal decisions without cabinet’s prior nod.

The Economic Coordination Committee (ECC) of the Cabinet decided to increase the regulatory duty on the import of wheat from 40% to 60%, said the Finance Ministry. The move is aimed at denying the consumers benefits of reduced wheat prices in the international market.

Wheat import: Food ministry waits for input on duty increase proposal

The domestic consumers will pay almost 100% more price than the international consumers because of the ECC’s decision. The domestic wheat prices stand at Rs35 per kilogramme as against the current international rate which in Pakistani currency comes to Rs18 per kg.

Economists have been criticising the government’s decision of denying domestic consumers the benefits of reduced commodity prices. However, the government is of the view that the decision was taken to support local farmers, who had been adversely affected by falling international wheat prices.

Last week, in a landmark judgment, the Supreme Court of Pakistan stopped the government from taking fiscal decisions without the prior approval of the federal cabinet. It also directed the government to give sufficient time to cabinet for discussing a decision.

After the apex court’s judgment, the legal and tax experts had hoped that the ruling would regulate the powers of the ECC, which – despite being a mere panel of the cabinet – performs often through one person the roles of both the executive and the legislature, they argue.

Wheat import: Govt mulls increasing regulatory duty by 20%

The court said fiscal notifications enhancing the levy of tax issued by the secretary, revenue division, or the minister are ultra vires. However, by flouting the apex court ruling, the ECC approved to increase the regulatory duty by a whopping 50% - just two days before a scheduled cabinet meeting.

A Finance Ministry official said the regulatory duty matter would be placed before the cabinet meeting, scheduled for Wednesday. The ECC also approved extension of reduced withholding tax rate of 0.4% for non-filers by another four months till December 2016. It is yet another matter where the ECC has taken over the role of parliament.

The ECC also approved the export of 100,000 metric tons of Calcium Ammonium Nitrate (CAN) on the recommendation of the Fertiliser Review Committee.

The committee observed that there was sufficient quantity of CAN available in the country and allowed its export subject to the condition that manufacturers would not increase domestic price and would provide an end user certificate that CAN would be used for agriculture purposes only.

The ECC also approved initiation of negotiation between Bank Markazi Jomhouri Islamic Iran and SBP on signing of agreement regarding Banking and Payment Arrangements.

The ECC gave approval for reducing re-lending rate of foreign loans for federal government departments, like the National Logistic Cell, the Civil Aviation Authority and autonomous bodies, and DFIs by 3% as compared with the re-lending rate approved in the Relending Policy of 2009.

The ECC also decided that the re-lending policy would again be reviewed after a period of 3 years.

Published in The Express Tribune, August 30th, 2016.

COMMENTS (1)

abood | 7 years ago | Reply Good decision.lets support our local farmers and strengthen our economy.well for people who want to save some cash i suggest buying one suit less can really help them and have a better life.lets cut of from things which are not so useful and not from the poor farmers.
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