Govt cuts taxes on imported used vehicles, age limit removed

ISLAMABAD: The federal government has announced to reduce taxes on the import of used vehicles and remove the age limit.

However, approval could not be obtained from the IMF to eliminate sales tax on items related to the educational needs of children.

According to details, while briefing the Senate Standing Committee on Finance, Secretary of Commerce Jawad Pal said that under the agreements signed with the IMF, the ban on the import of old vehicles for five years will be lifted from July, provided that the vehicles meet environmental standards, and the additional regulatory duty will also be reduced from 40 percent to 30 percent.

He said that the phased relaxation of restrictions on the import of used vehicles is part of the IMF conditions, which aims to provide equal opportunities to foreign sellers.

On the other hand, in the meeting of the Senate Committee, Director General of the Tax Policy Office, Dr. Najeeb Memon, revealed that the IMF has opposed any kind of tax exemption for the education sector.

According to him, the IMF rejected the proposal to abolish sales tax on pencils, clippers, photocopiers, and other stationery items.

It should be noted that in the last budget, an 18 percent sales tax was imposed on these items, due to which their prices increased significantly.

The situation has come to light at a time when the Prime Minister has announced the imposition of an education emergency in the country.

Meanwhile, Federal Finance Minister Muhammad Aurangzeb also refused to provide any tax concession for the beverage industry.

He also rejected the proposal for more tax relief for exporters, saying that the government has already provided facilities like a reduction in advance income tax, abolition of super tax, and low interest rates.

Regarding the national tariff policy, the Commerce Secretary said that the government intends to reduce the average import tariff to about 13.77 percent in the next fiscal year; last year it was 16.56 percent, and the regulatory duty on almost all goods except alcohol is being reduced to 20 percent.

Meanwhile, the National Assembly Standing Committee on Finance approved amendments to the Customs Laws, under which the special judge will have the power to freeze the assets of the accused in cases of money laundering or illegal financial transfer.