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April 8, 2021

Duty-free imports increase to Rs2.6 trillion

Business

April 8, 2021

KARACHI: Import volume of duty-free goods increased to Rs2.6 trillion during the tax year 2020 compared with Rs2.44 trillion in the preceding tax year, up 6.4 percent despite efforts of the government to reduce the number of exemptions and concessions.

The Federal Board of Revenue (FBR) data on Wednesday revealed that duty-free customs clearance increased by 11.6 percent only on import of 15 items. The major growth of 257 percent was seen on duty free clearance of iron and steel.

Import of dutiable goods fell by 12 percent during the tax year under review. The data revealed that the volume of dutiable imports fell to Rs4.45 trillion during the tax year 2020 as compared with Rs5.05 trillion in the preceding tax year.

A major fall of 35 percent in dutiable imports was recorded in the automotive industry. The dutiable imports of vehicles were Rs175.7 billion during the tax year 2020 as compared with Rs275 billion in the preceding tax year.

The total import volume processed by the customs stations across the country fell by 6 percent to Rs7.05 trillion during tax year 2020 as compared with Rs7.49 trillion in the preceding tax year.

Sources in Pakistan Customs said the dutiable imports during the tax year 2020 were declined due to concessions and exemptions granted on goods imported related to prevention from coronavirus spread. Besides, the overall import

bill was also declined due to restrictions witnessed during the year due to COVID-19.

They said the government has already started phasing out concessions and exemptions to make the taxation system equitable. They hoped that import of dutiable goods would be increased in coming tax years as due to additional measures taken by the government to withdraw unnecessary concessions granted to various individuals and corporate entities.

The collection of import duty for the year under review declined to Rs538 billion as compared with Rs605 billion in the preceding year. However, the collection of regulatory duty nominally increased to Rs72 billion as compared with Rs71 billion.

Further, the collection of export development surcharge also increased to Rs8.4 billion as compared with Rs7.7 billion. The data revealed that the authorities issued refunds and rebates to the tune of Rs12.29 billion during the tax year 2020 as compared with Rs16.57 billion, showing a decline of 26 percent.