ISLAMABAD: Finance and Revenue Minister Shaukat Tarin on Wednesday stressed the need for tariff rationalization to encourage industrialization as the government scrambles to avoid the impact of import tariff cuts on collecting revenue. “The rationalization of tariffs is a pressing need at the time. The rationalization of the tariff structure should aim to broaden and strengthen the industrial base and contribute to overall economic growth, ”Tarin said at a meeting at the finance division.
“A dynamic tariff structure is vital for export-oriented industrialization and improves the competitiveness of domestic industry.”
Minister of Industry and Production Khusro Bakhtyar, Prime Minister’s Advisor for Trade Razak Dawood, Prime Minister’s Special Assistant for Revenue Waqar Masood, and others attended the meeting.
The Ministry of Commerce gave a detailed presentation of the current tariff structure and briefed the Minister of Finance on tariff rationalization measures and its role in strengthening economic activities in the country.
The government has spoken of tariff rationalization to improve the competitiveness of industrial production in the world market and the ease of doing business. The government has streamlined the tariff / tariff structure for over 30,000 raw materials and intermediate goods in the 2020/21 budget. The government removed additional tariffs and regulatory duties on 30,000 items of raw materials, which would negatively impact annual revenues of Rs 14 billion.
The government has been advised to change its dependence on importation on other taxes, such as sales tax and income tax, as the 45% of Pakistani taxes are collected at the import stage, while ‘in India, they are 21%, in Bangladesh (28%) and in developed countries (10 percent).
However, the government wanted to achieve the objective of industrialization by rationalizing tariffs. This reduction in import duties will help revive economic activities and increase declining exports.
The budget deficit was recorded at 3.5% of GDP between July and February FY2021, compared to 3.7% of GDP in the corresponding period a year earlier.
“Fiscal performance in the first eight months of fiscal 2021 is an indication of successful adherence to fiscal discipline through prudent expenditure management and efforts to improve revenues,” the finance ministry said in a final statement. report. “In particular, RBF tax collection has seen double-digit growth in the first nine months of fiscal 2021, which reflects the growth of economic activities in the country despite the challenge of the third wave of COVID19. Current revenue performance is expected to improve further in the last quarter of fiscal 2021 compared to the same period of fiscal 2020, when economic activities were halted due to COVID-19. “