Government reduces taxes on imported sugar to avert shortage
The Economic Coordination Committee (ECC) has decided to significantly reduce taxes in order to facilitate the import of sugar to avoid a sugar shortage.
Pakistan currently has a stock of 1.2 million tonnes of sugar, which is expected to run out in two months. In order to avoid this, it has been decided to reduce taxes for the import of 300,000 tonnes of sugar.
The imported sugar will be subject to sales tax of 1% instead of 17%. Withholding tax has been reduced from 5.5% to 0.25% while value added tax was temporarily waived.
The reduction in taxes is expected to keep the sugar price in check in the local market as it is expected that the imported sugar will continue to sell at Rs80 per kg.
The ECC meeting was chaired by Adviser to the PM on Finance Abdul Hafeez Sheikh. Industry and Production Minister Hammad Azhar says the decision will improve the country’s sugar reserves and its availability in the country.
The Trading Corporation has been directed to issue tenders and take other measures within a week to facilitate the process of importing sugar.
Tax exemptions have already been given due to a possible shortage of 1.5 million tonnes of wheat. The private sector has started importing 500,000 tonnes of wheat and the first shipment will arrive in Pakistan on August 26.
The ECC also allowed the Trading Corporation to issue an initial order for the import of 200,000 tonnes of wheat.