The Pakistan government has decided in principle to impose a temporary ban on the import of completely built unit (CBU) of vehicles (imported cars) for the next six months (Jan-June 2022) as well as jacking up regulatory duty (RDs) and additional customs duty (ACD) on 10 to 12 other luxury items in order to curtail yawning current account deficit, The News reported.
With the approval of a temporary ban on the import of CBU, the government wanted to curtail its import bill to the tune of over $3 billion on annual basis, the report said.
Pakistan’s 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 worrying that with the existing pace, the CAD might cross the $15 billion mark for the current fiscal year. The economic managers continued discussions with key stakeholders including ministries/divisions here on Tuesday with the objectives to consider measures for curtailing the CAD, the report said.
Initially, it was learnt that the Prime Minister’s Office issued instructions to slap a ban on 10 luxury items, but ministries/divisions opposed the move and argued that there might be severe backlash from the World Trade Organisation (WTO) and some bilateral trading partners.
In case, the government moves ahead with jacking up RDs and ACDs on remaining luxury items at the import stages such as cosmetics, pet foods, tyres, diapers and some other items, the import bill is going to be reduced, the report added.