ISLAMABAD: Pakistan may lift a ban on gold import after ten years once the International Monetary Fund (IMF) stalled program is revived, a special secretary for commerce on Thursday informed a parliamentary panel.
The country’s demand and consumption of gold are 150 to 200 tons per annum, but there is a ban on bullion import for the last 10 years. Most of the demand for raw yellow metal is being met through smuggling into the country.
A meeting of the sub-committee of the Senate Standing Committee on Commerce held with Senator Fida Muhammad in the chair to discuss the import of gold in the country.
“Since the metal is smuggled to meet the demand, so why not its imports should be allowed through legal ways?” members of the committee said.
Salman Hanif, chairman of Gem and Jewellery Association, apprised the committee and said, “Total consumption of gold in Pakistan is around 150 to 200 tons annually and the irony is that, there has been a ban on the import of gold for last 10 years.”
Hanif further said Finance Minister Miftah Ismail had reduced the withholding tax from 5 to 1 percent, but the ban on gold import had not been lifted, he lamented.
Special secretary for commerce, Ahmed Mujtaba Memon said, “State Bank has declared gold as luxury and non-essential item and banned its import. The bank doesn't have the required amount of foreign reserves to lift the ban on the import of gold and it would be lifted after IMF bailout.”
Senator Anwar ul Haq Kakar was of the view that the loan was not a problem, “the real problem is the productive utilisation of the loan.”
The USA has the biggest loan against foreign reserves, but they utilise the loans to manufacture productive items, he added.
Kakar emphasised that the gold industry had potential and a ban on the import of gold should be lifted.
The committee directed the Gem and Jewellery Association to submit their suggestions for onward submission to Senate Standing Committee on Finance and Revenue.
The SBP updates the country’s gold reserves data on monthly basis, showing that in May 2022, Pakistan’s gold reserves were $3.882 billion, decreasing from the previous April’s holding of $3.973 billion.
The data reached an all-time high of $4.083 billion in Jul 2020 and a record low of $23 million in December 1956. It is to be noted that countries use gold reserves as an insurance policy against an economic crash.