ISLAMABAD: Prime Minister Imran Khan is made to believe that only one person - Jehangir Tareen - betrayed and ditched him but the premier needs to look around perhaps there are others too, informed official sources warned.
These sources though think that Prime Minister Imran Khan has been hoodwinked by some of those whom he trusted, insisted that the love affair of the government with the sugar lobby still continues.
In February this year, the Ministry of Industries and Production approached the ECC with the proposal to allow tax-free import of about 300,000 tonnes of sugar to help check rising sugar prices in the country. The ECC did not allow this and instead put an immediate ban on its export. The ECC was of the view that duty-free import would cost the government about Rs14 billion on account of duty and tax waivers.
According to media reports, the ECC believed the imports would be of no help in price control and could in fact be counter-productive. Later in a cabinet meeting, the sources said, Asad Umer reportedly raised the issue and consequently the cabinet decided to remove the regulatory duty on sugar imports. A notification by the Revenue Division was also issued on Feb 24, 2020.
However, later again sales tax was imposed on imported sugar at $750 per tonne even though the price of sugar in international market was $375 per ton. This means, the sources explain whereas the sales tax on domestic sugar was about Rs11 per kg, the sales tax on imported sugar was Rs21 per kg, giving another cushion of Rs10 per kg to the sugar barons.
The sources said that this was finally removed after some cabinet members took up this matter within the government. It is expected that everything will be crystal clear -- as to what transpired in the whole affair involving powerful sugar lobby and who imposed the sales tax at $750 per tonne when the federal cabinet had waived the regulatory duty -- on April 25 when the report of Inquiry Commission on hike in domestic prices and export of the commodity would come to the fore.
Even today, after the coronavirus pandemic, when the government tried to remove duty and taxes on all food items, sugar importers have to pay 5.5 percent advance income tax whereas again for the local sugar the advance income tax was reduced in the last budget from 4.5 percent to 0.25 percent only.
“So the service rendered by the government to the cause of the domestic sugar industry at the cost of the Pakistani people is immense and still continuing,” a source said.
It is said that the sugar import on a competitive price will help the government to check hike of sugar price in the country. Today even with sugar reaching Rs90 per kg and dollar reaching Rs167, there is no import of sugar and this situation is so pleasing for the local sugar producers, a source said.
The FIA inquiry report has already warned that the Satta rates of the commodity for Ramazan are now Rs100 per kg. Additionally some members of the sugar mafia have already threatened the prime minister that the sugar price may touch Rs110 per kg if the ongoing probe by the Sugar Commission is not stopped.
FIA DG Wajid Zia, it is said, was also threatened by the same mafia. Zia was also asked to stop the probe.
The price of sugar was stable around Rs55 per kg when ECC in 2018 allowed its exports. Since then the price skyrocketed. The average monthly price of sugar since then has been Rs68.21 per kg. So the government intervention had increased the price in Pakistan by Rs13.74 per kg.
It is said that it means at about 425,000 tons of consumption per month the people of Pakistan are paying Rs5.7 billion per month extra to the sugar industry. In the last 16 months from November 2018 to February 2020, the people have paid an extra Rs87 billion and in March 2020, with the price of sugar at Rs80 per kg, the people paid extra Rs10 billion. And now, the sugar price in the market is up to Rs85-90 per kg. It means more profits for the sugar industry.
