Pakistani’s recent step towards providing tax exemption and subsidies for imported sugar received objections from the International Monetary Fund (IMF), which warned that the decision could undermine an ongoing loan agreement of $ 7 billion with a global creditor.
According to Ary News, who quoted official sources, the IMF opposed the federal government plan to subsidize imported sugar 55 PKR per kilogram, it is expected to reach the cost of 249 PKR for the barrel. The IMF rejected Islamabad’s argument that it qualified as a “emergency emergency” reaction.
IMF concerns from imported sugar
The key problem is that a large proportion of imported sugar is likely to be consumed by industrial users rather than ordinary households, which the IMF considers incompatible with public interest and violation of fiscal discipline.
The Federal Government is now re-evaluating its decision to grant full exceptions from the import of 500,000 metric tonnes of sugar-approved federal cabinet without prior consultation with the Ministry of Finance.
The Federal Income Council (FBR) gave up all obligations and taxes from these imports, while the trading company in Pakistan (TCP) issued an offer of 300,000 metric tons, with offers closed by 18 July.
The Pakistani Association Sugar Mills Association (PSMA), which contributes to controversy, reported that local mills had sufficient stocks to satisfy national demand until November. PSMA claimed that it could deliver 530,000 tons per month and criticized the government for storing a turnover overlapping exceeding PKR 25 per kilogram on the locally produced sugar.
Pakistan must re -examine his strategy of importing sugar
The IMF concerns increased pressure on the government to reconsider their sugar import strategy, which now faces objections from the creditor and the domestic industry.
As part of this development, the government and sugar refineries have reached an agreement to reduce sugar prices and set a new Ex-Mill rate PKR 165 per kilogram, Dawn informed on Monday. The Ministry of National Food and Research described this as a “great relief” to the public.
Provincial governments will now be responsible for ensuring the availability of sugar at a reduced price. The Ministry spoke with PSMA to assess current bid trends, price trends and future strategies.
Earlier government efforts failed to control market prices that continued to grow to 200 per kilogram of PKR, which led to a recent price agreement.
The agreement was followed by the Federal Government decision to import 350,000 metric tons of sugar, determined on the basis of immediate market needs and expected demand in the coming weeks.
The imported sugar will be first -class quality and meets market standards. TCP will control import to ensure transparency, quality control and government supervision.
To support this initiative, all obligations and taxes on sugar imports were removed to increase the sugar more accessible and reduce inflation pressures, Dawn informed.
(Tagstotranslate) Pakistani exemption from tax
