FBR waives regulatory duty on wheat, sugar import
Move aimed at pushing down prices of commodities
The FBR has issued a notification for the withdrawal of 40% regulatory duty on sugar aimed at facilitating the import by the private sector. PHOTO: FILE
ISLAMABAD:
The Federal Board of Revenue (FBR) on Monday waived regulatory duty on the import of sugar and wheat aimed at facilitating the private sector in importing the commodities to bring prices down in the local market.
The revenue board has issued two separate notifications for the withdrawal of regulatory duty with immediate effect.
It has withdrawn 60% regulatory duty on the import of wheat for 36 days. “The notification shall remain in force till March 31, 2020,” said the FBR. However, it is highly unlikely that shipments of 500,000 tonnes will reach Pakistan within one month. Last week, the Economic Coordination Committee (ECC) of the cabinet allowed the private sector to import 500,000 tonnes of wheat while turning down the proposal of permitting the Trading Corporation of Pakistan to import the grain.
The decision on duty-free import of wheat for only five weeks has apparently been taken to keep prices of the locally produced wheat stable.
Next wheat crop is expected to arrive in the market in mid-April. The ECC decided that the public sector would procure 8.25 million tonnes of wheat at the rate of Rs1,365 per 40 kilogramme, according to the finance ministry. This will require at least Rs112 billion to procure the commodity from farmers.
Last year, the ECC set the wheat procurement target at 6.25 million tonnes but the federal and provincial governments procured only four million tonnes, which led to over 40% reduction in stocks this year. The government’s ill-timed permission for wheat export also contributed to a steep reduction in stocks. There are also serious questions over the availability of wheat stock at public storages.
During a surprise inspection of government-owned storages in Islamabad by a joint investigation team (JIT) probing wheat crisis, 70% of the commodity was found to be missing, according to the sources.
Prime Minister Imran Khan has not yet ordered the release of JIT report, which has pointed the finger at two senior politicians.
The FBR has also issued a notification for withdrawing 40% regulatory duty on sugar aimed at facilitating the import of 300,000 tonnes by the private sector. While overturning a decision of the ECC, the federal government has allowed import of 300,000 tonnes of sugar.
In December 2018, the Pakistan Tehreek-e-Insaf (PTI) government had allowed export of 1.1 million tonnes of sugar. The export of sugar often results in an increase in the commodity’s price in the local market.
The Ministry of Industries and Production had proposed that the ECC should ban the export of remaining 350,000 tonnes of sugar against the approved quota of 1.1 million tonnes and allow import of 300,000 tonnes of the commodity.
Published in The Express Tribune, February 25th, 2020.
The Federal Board of Revenue (FBR) on Monday waived regulatory duty on the import of sugar and wheat aimed at facilitating the private sector in importing the commodities to bring prices down in the local market.
The revenue board has issued two separate notifications for the withdrawal of regulatory duty with immediate effect.
It has withdrawn 60% regulatory duty on the import of wheat for 36 days. “The notification shall remain in force till March 31, 2020,” said the FBR. However, it is highly unlikely that shipments of 500,000 tonnes will reach Pakistan within one month. Last week, the Economic Coordination Committee (ECC) of the cabinet allowed the private sector to import 500,000 tonnes of wheat while turning down the proposal of permitting the Trading Corporation of Pakistan to import the grain.
The decision on duty-free import of wheat for only five weeks has apparently been taken to keep prices of the locally produced wheat stable.
Next wheat crop is expected to arrive in the market in mid-April. The ECC decided that the public sector would procure 8.25 million tonnes of wheat at the rate of Rs1,365 per 40 kilogramme, according to the finance ministry. This will require at least Rs112 billion to procure the commodity from farmers.
Last year, the ECC set the wheat procurement target at 6.25 million tonnes but the federal and provincial governments procured only four million tonnes, which led to over 40% reduction in stocks this year. The government’s ill-timed permission for wheat export also contributed to a steep reduction in stocks. There are also serious questions over the availability of wheat stock at public storages.
During a surprise inspection of government-owned storages in Islamabad by a joint investigation team (JIT) probing wheat crisis, 70% of the commodity was found to be missing, according to the sources.
Prime Minister Imran Khan has not yet ordered the release of JIT report, which has pointed the finger at two senior politicians.
The FBR has also issued a notification for withdrawing 40% regulatory duty on sugar aimed at facilitating the import of 300,000 tonnes by the private sector. While overturning a decision of the ECC, the federal government has allowed import of 300,000 tonnes of sugar.
In December 2018, the Pakistan Tehreek-e-Insaf (PTI) government had allowed export of 1.1 million tonnes of sugar. The export of sugar often results in an increase in the commodity’s price in the local market.
The Ministry of Industries and Production had proposed that the ECC should ban the export of remaining 350,000 tonnes of sugar against the approved quota of 1.1 million tonnes and allow import of 300,000 tonnes of the commodity.
Published in The Express Tribune, February 25th, 2020.