This refers to the news report ‘Govt eyes Rs 20bln through RDs on 1800 items’ (Sep 27). The purpose of imposing regulatory duty is to curb heavy imports. However, the modest amount of tax applied on luxury and unnecessary items in the supplementary budget is not going to achieve the purpose. The revenue addition being projected is only Rs20 billion, which is just the half percent of the budget.
For a meaningful reduction in the import bill, a 100 percent levy should have been imposed on luxury items. This could actually hurt consumers who belong to the elite class. It would have discouraged consumption of these items, resulting in low demand of these imports. It seems that the PTI, which is new in government, is experimenting with different ideas. But this would prove disastrous as time is running out to avoid a default situation on the external front.
Arif Majeed
Karachi