Pakistan imports tons of vehicles every year and the customs revenue remains at the top for adding revenue to the national exchequer, Pakistan has earned almost Rs97.094 billion in customs duty during the year 2017-18 against Rs78.313 billion during 2016-17 showing a growth of 23.98%.
According to the Federal Board of Revenue (FBR), the customs duty on imported vehicles has increased from 15.4 percent in 2016-17 to 15.6 percent in 2017-18. The FBR said customs duty remains at around 26% indirect taxes and 16% federal taxes.
The customs duty share is increasing gradually in FBR books. According to the data, FBR collected net customs duty of Rs608.3 billion during the financial year 2017-18 a growth of 22.5%. Overall FBR revenues also increased due to growth in customs collection.
Import data indicates that 59 percent of customs duty was collected on 10 major commodities grouped in Pakistan Customs Tariff (PCT), and vehicles (Non-Railway) remained at the top of revenue generators contributing 15.6 percent to the customs duty during the financial year 2016-17 it was also up by 24% during this year.
The second most robust contributor in customs duty was Petroleum Oil Lubricants (POL) group, customs revenue grew by 16 percent against 25.7 percent growth in dutiable imports. Steel and Iron remained the third major source for customs revenue collection, FBR recorded the growth of 25 percent, machinery, and mechanical appliances also contributed to a growth of 9.4 percent.
Electrical machinery also contributed an overall positive growth in collection of 19 percent including 13.1 percent in edible oil, 28% in ceramic products, 59.2% in plastic resins, 1.8% in Iron and Steel and 22.4 percent in paper & paperboard.
Since it is plausible for the government to collect customs revenue from imports but that is not sufficient in the long run, the government must produce substitutes for the imports in the home country in order to reduce the import bill while focusing more in exports, the trade deficit of Pakistan touches the new heights creating problem for the economy as a whole.
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