The government announced a policy change that allows luxury imports on Thursday as part of the condition of the IMF. Although the ban was lifted three months ago, it was first announced to start being implemented on May 18, 2022. The federal Minister for Finance and Revenue announced this at the press conference.
Miftah asserts that to support the country’s economy and justify lifting the luxury goods ban imposed in response to the rupee crisis, Pakistan should charge high tax rates on these items.
Miftah, on Friday, announced the government would raise customs to almost three times and impose heavy taxes of 500 to 600% on luxury items. The rise of duty will depend on the country’s ability to meet its obligations with the WTO and IMF.
The Ministry of Industry recently announced that it is banning the import of those “completely built units.” Those products use a range of inputs, and changes to their list mean they now have to pay higher import duties.
He explained that a detailed exercise is underway in the various government departments and ministries.
Miftah Ismail said, “there will be meetings with the Central Bank of Pakistan, the Finance Ministry and other pertinent offices to resolve any issues with duty payments tomorrow and eliminate all barriers for exporters.”
The finance minister said that the long-awaited IMF meeting is scheduled for next week and that they can approve the $1.17 billion tranche Pakistan requested.
Miftah stated that Pakistan would acquire the foreign reserves it needed by getting loans from friendly countries. He mentioned that Pakistan got the cash in exchange for short-term funding in these regions: Saudi Arabia, Qatar, and the UAE.
The minister said China is helping Pakistan by re-rolling its current loans, while Saudi Arabia also said they would likely be re-rolling future loans.