Pakistan has decided to impose a 10 percent regulatory duty on the import of petrol from China in a bid to plug the loophole created by the agreement between Pakistan and China in 2019 that abolished tariff on import of petrol and subsequently caused losses of over Pakistani Rs 40 billion.
Under the China-Pakistan Free Trade Agreement (CPFTA) renegotiated in 2019, the Pakistan government had issued statutory regulatory orders on December 31, 2019, that abolished tariff on the import of petrol.
The avoidance of taxes by the oil marketing companies has caused over Rs 40 billion losses in just a few months. The Federal Board of Revenue (FBR) has prepared a summary for the cabinet approval for the 10 pc regulatory duty on import of petrol from China, reported The Express Tribune.
A few months ago, the Collectorate of Customs Enforcement, Karachi unveiled this misuse of the China-Pakistan Free Trade Agreement. The import of petrol is subject to 10% customs duty but no levy is collected if petrol is imported from China under CPFTA.
In the budget that was passed by the Pakistani government, the customs duty was doubled, from 5 pc to 10 pc. Consequently, this increased the prices of oil, a very important fuel.
The government has already taken a hit of Rs 40 billion on its revenues during the current fiscal year due to the duty-free import from China. On the current import value, the monthly losses due to the misuse of FTA have increased to Rs 22 billion, said a senior FBR officer, reported the newspaper.
( With inputs from ANI )
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