ISLAMABAD: The federal government has decided to impose a temporary ban on import of completely built units (CBU) of vehicles [imported cars] for the next six months [January to June 2022], according to a report published in private newspaper.
According to the report published in The News, the government has taken the decision after the current account deficit reaches an alarming $1.6 billion a month. Meanwhile, the authorities have also decided to hike regulatory duty (RD) and additional customs duty (ACD) on 10 to 12 other luxury items to bring Pakistan’s current account deficit in check.
With the approval of a temporary ban on the import of completely built units (CBU) of vehicle, the government wanted to curtail its import bill to the tune of over $3 billion on annual basis.
Meanwhile, Car Exporter Association for Pakistan President (CEAFP), Eng. Rashid Mehmood Awan has confirmed the development to MM News. However, he said, those vehicles which are imported by overseas Pakistanis are not banned.
The current account deficit (CAD) had touched $5.1 billion in the first four months (July-October) period of the current fiscal year (FY2021-22) against $2.3 billion, approved by the Parliament and the National Economic Council (NEC) during the last budget 2021-22 for the whole fiscal year.
Now the government seems to be worrying that at the existing pace, the CAD might cross the $15 billion mark for the current fiscal year.
As per the report, the Prime Minister’s Office issued instructions to slap a ban on 10 luxury items, but the ministries/divisions opposed the move and argued that there might be severe backlash from the World Trade Organisation (WTO).
In case, the government moves ahead with jacking up RDs and ACDs on remaining luxury items such as cosmetics, pet foods, tyres, diapers and some other items at the import stages. Additionally, the government decided to slap a temporary ban on the import of just CBU for the next six months period.
Prime Minister’s Advisor on Finance and Revenues Shaukat Tarin has instructed the tariff board to hold its meeting immediately and grant approval on slapping a temporary ban on CBU of vehicles and increasing RDs and ACDs on a few other selected luxury items.
