LAHORE: The ruling Pakistan Tehreek-e-Insaf government has increased more than 100 per cent duties and taxes on cooking oil and vegetable ghee since it come to power in 2018.The duties and taxes on...
LAHORE: The ruling Pakistan Tehreek-e-Insaf (PTI) government has increased more than 100 per cent duties and taxes on cooking oil and vegetable ghee since it come to power in 2018.
The duties and taxes on edible oil (cooking oil) were at Rs31,501 per metric ton in 2018 which currently reached Rs68,506 per metric ton, registering an increase of Rs37,005 per metric ton.
According to official data available with The News, the duties and taxes on edible oil were Rs31,501 per metric ton when the PTI assumed power in 2018-19 and it slapped additional Rs2,518 per metric ton, pushing it to Rs34,019 per metric ton. A further increase of 5.99 per cent in duties and taxes was made in the fiscal year 2019-20 and it reached Rs40,005 per metric ton with an increase of Rs5,986 per metric ton.
The government unable to understand the public issues and failed to control inflation, again gave another big push of 19.41 per cent in duties and taxes on edible oil in 2020-21. The duties and taxes reached Rs59,417 per metric ton with an increase of Rs19,412 per metric ton. Currently, another increase of Rs9,089 per metric ton or 9.09 per cent was made and it reached Rs68,506 per metric ton.
Interestingly, the previous PML-N government during its tenure overall maintained the duties and taxes on edible oil. The duties and taxes were 30,521 in 2013-14 which in 2018-19 was Rs 34,019 per metric ton made an increase of Rs 3,498 per metric ton in five years.
Now the Asad Umar has announced a reduction in the duties and taxes to provide relief to the public from the escalating prices of edible oil in international markets. According to the announced reduction in duties and taxes, yet to be notified by the Federal Board of Revenue (FBR) and other authorities concerned, will be around Rs 32 per kilogram. The final notification will likely be issued once the Advisor to Prime Minister Shaukat Tarin will return from the US after IMF talks.
According to the proposed reduction in the duties and taxes on edible oil, the additional Custom duty (ACD 2 per cent) accounted for Rs 4,908 per metric ton at $1367 CNF per metric ton price of edible oil will be removed. Further, the Customs duties will be reduced to half, creating an impact of Rs 4,590 per metric ton. Similarly, reducing the sales tax to half will also be announced which will give an impact of Rs 21280 per metric ton. Thus, the total impact will be Rs 30,778 per metric ton. The dollar-rupee exchange parity is calculated at Rs 171.12 for 1$. However, since the exchange rate of volatile, the changed exchange rate will increase reduction as Custom duties are calculated at the imported price made in USD.
However, no announcement has been made on the fixed rate of FED which is Rs 6000 per metric ton as it was adjusted in the input-output adjustment of the cooking oil and ghee manufacturers tax returns. If this will also reduce, then the impact will be around Rs 37 per kilogram. If the PTI government will implement Asad Umar announced reduction in duties and taxes then it will bring the duties and taxes back to the level where they started when assumed the government.