KARACHI: The Federal Board of Revenue (FBR) has unveiled a series of reforms concerning customs duties as outlined in the Finance Bill 2024. The FBR’s announcement highlighted several guiding principles aimed at bolstering the economy while providing relief to the common man.
Key Principles and Relief Measures
The FBR’s strategy focuses on maintaining stable duty rates on essential imports, alleviating financial burdens on citizens, and fostering domestic industries to reduce reliance on foreign goods. Notably, the new measures include exemptions on Additional Customs Duty (ACD) for critical medical supplies such as hemodialyzer fluids and powders, as well as on bovine lipid extract surfactant, a vital component in medical treatments.
Regulatory Duty Regime Overhaul
The revised regulatory duty (RD) regime seeks to promote local manufacturing through targeted levies on specific imports, alongside adjustments to the RD on vehicle imports and flat rolled iron and steel products. The FBR has also withdrawn RD exemptions on certain food items and continued RD on chloroparafins liquid, signaling a shift towards protecting local producers.
Exemption Regime Review
In a move to recalibrate the import landscape, the FBR has withdrawn customs duty concessions on fresh and dry fruits, home appliance inputs, and hybrid vehicles. Electric vehicles valued over $50,000 will see a reduction in duty concessions, while incentives for solar panel manufacturing and seafood processing machinery have been introduced.
Tariff Rationalization and Legislative Changes
The Finance Bill 2024 also addresses tariff rationalization, with adjustments to customs duties on aerosol containers, submersible pump parts, and key commodities like wheat, sugar, and energy resources. Legislative amendments include the definition of nuclear materials for security purposes, the establishment of enforcement directorates, and enhanced penalties for customs-related offenses.
Miscellaneous Provisions and Future Outlook
Additional measures include the levy of customs duty on localized auto parts and the creation of new product codes to streamline trade. The FBR’s comprehensive approach reflects a commitment to economic resilience, sustainable growth, and the enforcement of robust trade regulations.
As Pakistan navigates the complexities of global trade, the FBR’s reforms under the Finance Bill 2024 mark a pivotal step towards a more balanced and self-reliant economic framework.