Restricted imports of 600 non-essentials
Government is restricting the imports of 600 non-essential items to support the ongoing efforts to preserve the stability of the exchange rate and foreign currency market liquidity, particularly by discouraging excessive imports of a speculative nature, official sources said.
The Finance Ministry is proposing to suspend the import of 600 non-essential items considering the pros and cons of the proposal submitted by the Central Bank (CB) which had only requested to raise taxes on those items, a senior ministry official disclosed.
The extra revenue generated by increased duties based on CB’s proposal would be helpful in raising tax revenue to some extent but it has a minimal impact on the present dollar crisis as importers are not ready to curtail their imports, he said.
He added that the ministry has taken a decision to suspend the import of these non-essentials as it is a more feasible option than increasing taxes on these items, he said.
On average US$5-$ 6 billion is spent on the import of non-essential including cheese, butter, vegetables, fruits, ice cream, chocolate and sauces etc.
According to CB data, the expenditure on imports of consumer goods increased by $447.05 million to $3848.71 million in 2021 from $3401.66 million in 2020.
However the tax revenue from the increase in 600-700 non-essentials will be around 5 to 10 per cent, provisional estimates and mathematical model predictions revealed.
A sum of $384.27 million was spent in 2021 to import vegetables. This was an increase of $31.41 million compared to 2020, CB data revealed.
The government has spent $67.56 million in 2021 to import fruits such as grapes, oranges, apples and pears compared to $58.14 million in 2020 despite import restrictions.
The total cost for dairy products such as cheese and butter imports was around $17 million while the cost for the imports of oils and fats was $1 billion in 2021.
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