Protectionism: Govt to impose 10% duty on tractor imports

Introduction of tariff will boost industry, can enhance sales of locally manufactured tractors, scale down its prices.

ISLAMABAD:

The government is willing to impose 10% duty on tractor imports in order to protect Pakistan’s nascent tractor industry in upcoming budget 2012-13, say sources.

The introduction of tariff will boost local industry and can enhance the sales of locally manufactured tractors and scale down its prices. The core of government’s argument is that Pakistan’s infant industries do not have economies of scale that international competitors have, and thus need to be protected.

Currently, tractors can be imported duty free and federal treasury has been giving subsidy of Rs20,000  per tractor. The government has reduced general sales tax (GST) from 16% to 5% making it cheaper by Rs60,000 to Rs100,000 per unit. During the first nine months of fiscal year 2011-12 local tractor production declined to 27,131 units.

Published in The Express Tribune, May 30^th, 2012.