ISLAMABAD: Ahead of the newly elected government, the Commerce Division and Customs Department are working on various proposals to reduce the country’s growing import bill, an official told Dawn.

The Trade Division is working on an exercise to identify certain tariff lines that will be offered to the new government to impose quantitative restrictions on its imports.

The division is doing the exercise as part of the 100-day plan for the newly elected government.

As part of the proposed plan, the ministry – headed by Secretary Younus Dagha – also suggests restricting imports of certain luxury items or banning them altogether. However, this plan is being discussed by the bureaucracy.

The final green light will be given by the PTI-led government when it forms government next week. It will then be decided to opt for this proposal or to propose an alternative. However, it is not clear whether these measures will bear fruit or not. But the official believes such drastic measures will have a negative impact on the country’s industrial sector.

At the same time, the division is negotiating preferential agreements with several countries to encourage their imports while in return seeking market access for Pakistani products. No official response was received from the Commerce Division until the filing of this story about them.

The import bill hit a record $ 60.86 billion in 2017-18, up from $ 52.9 billion the year before, an increase of 15%.

Last year, the Commerce Division also took several measures such as proposing regulatory fees as well as qualitative restrictions to control import flows.

Yet the country’s trade deficit reached an all-time high of $ 37.6 billion in 2017-18, up from $ 32.5 billion the year before.

On the other hand, the Customs Department of the Federal Tax Council is also working on a proposal to impose more regulatory duties on luxury and non-essential items. This proposal will be discussed with the new government, an office official told Dawn.

The Customs Department is also a beneficiary of this measure because it allows it to garner additional revenue.

But a senior department official said apparently the move would help reduce imports. “We are also analyzing the impact of regulatory fees on import flows,” the officer said.

The government imposed regulatory duties on 1,500 tariff lines last year, of which imports of 700 lines fell in the outgoing fiscal year, the official said. As a result, customs revenue of 13 billion rupees fell from these lines in 2017-18.

Overall import growth was 30% in the first months of last year, but slowed to 19% following the imposition of regulatory fees, the official said. Dutiable imports increased 13%, while duty-free items increased 37 times in the outgoing fiscal year.

Last year, the State Bank of Pakistan also announced 100% cash margin restrictions on the import of 131 items to discourage the import of non-essential items.

Posted in Dawn, le 10 August 2018