Senate Standing Committee on Finance was informed that imposition of regulatory duty (RD) on import of new items as well as raise in duty of existing ones would help increase country's exports by $500 million. A meeting of the committee presided over by Senator Saleem Mandviwalla was given a briefing by Chairman Federal Board of Revenue (FBR) Tariq Pasha and officials of Commerce Ministry here on Tuesday.

Pasha stated that purpose of RD on import of non-essential commodities was to discourage imports. He said it was meant to reduce trade deficit and not to mobilize revenue. He added that increase in import of non-essential items during the first quarter of the current fiscal year led to widening of trade deficit and an alarming increase in imports necessitated imposition of a regulatory duty.

Chairman FBR said the decision was taken after weighing its positive and negative impacts and subsequent to approval of the Economic Coordination Committee (ECC) of the cabinet, federal cabinet and the FBR.

Denying any increase in RD on 731 items, Pasha said that RD was imposed on only 26 new items and 21 old ones. He added the perception of increase in RD on 731 items was not true as FBR merged 8 SROs.

Members of the committee expressed their concerns over imposing RD after the budget and stated increase in RD on some items was inappropriate.

Senator Mandiviwala said that how eggs and pudding fall under the category of luxury items while Senator Mohsin Aziz stated that RD will not improve balance in imports and exports instead import will further increase with serious implications for local industry. The committee sought the details of percentage increase in RD on imports of commodities in the next meeting.

Copyright Business Recorder, 2017