ISLAMABAD ( Web News )
Sardar Yasir Ilyas Khan, President, Islamabad Chamber of Commerce & Industry (ICCI) said that the government had made exorbitant increase in import tariffs on luxury goods to deal with the issue of trade deficit, but this policy has not produced any significant benefits for the economy as high import tariff on luxury goods always increased their smuggling and deprived the government of tax revenue as well. Therefore, he said that the government should reconsider this policy and rationalize high import tariffs on luxury goods that would help in promoting business activities and improving tax revenue of the country.
Sardar Yasir Ilyas Khan said that the small sector of luxury goods normally made a significant contribution to the exchequer relative to its size and the government should factor this into its calculations to revise the punitive charges and convert the unofficial sales into documented and revenue generating transactions. He said that high import tariffs on luxury goods forced people to buy these goods abroad during their foreign travels, which benefited the foreign countries at the cost of Pakistan’s economy. He said that the trend of shopping malls and shopping centres was now on the rise in the Tier 1 and Tier 2 cities of the country and the presence of luxury brands in these malls was a source of drawing more customers and motivating them to buy local products as well. However, increasing import tariff on luxury goods will cause a drop in mall traffic, reduce economic activities and consumers would also not feel happy without the availability of international brands in malls.
ICCI President said that the government should also rationalize high import tariffs on luxury vehicles as they were not being assembled in Pakistan. He said that the reduced import tariff on luxury vehicles would meet the needs of this niche market and also help in improving tax revenue for the government. He further said that the government should allow import of antique vehicles including 5 and 3 years old ones that would also improve tax revenue for the exchequer.
Sardar Yasir Ilyas Khan said that the reliance on taxes collected at the import stage was on the rise as the FBR managed to collect an amount of Rs.441 billion as sales tax from imports during the first half of the current fiscal year of 2020-21. However, he said that heavy reliance on tax collection at the import stage enhanced the cost of doing business and increased prices for end consumers, therefore, the government should revisit this policy.