Islamabad, Pakistan – Web Desk: The federal government has announced a reduction in taxes on imported used vehicles and the removal of age restrictions, but failed to secure International Monetary Fund (IMF) approval to exempt sales tax on children’s educational stationery items, officials told a Senate standing committee on Tuesday .
Commerce Secretary Jawad Paul briefed the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, that the five-year age limit on commercial imports of used vehicles will be lifted starting July, subject to compliance with environmental standards . The additional regulatory duty on used vehicle imports will also be reduced from 40 percent to 30 percent by next month .
The easing of used car import restrictions is part of a phased approach under commitments with the IMF, aimed at liberalizing trade and providing equal opportunities to foreign sellers .
IMF Rejects Education Tax Exemption
In a separate development, Director General of the Tax Policy Office Dr Najeeb Memon revealed that the IMF has opposed any tax exemption for the education sector .
“The IMF has opposed tax exemption for the promotion of education in Pakistan and did not agree to the proposal of keeping the stationary goods exempted from the sales tax,” Memon told the committee .
The previous budget imposed an 18 percent sales tax on essential school items including pencils, geometry boxes, sharpeners, and exercise books, significantly increasing their prices . The decision comes despite Prime Minister Shehbaz Sharif’s declaration of an education emergency in Pakistan .
Broader Tariff Reforms
The government also presented the second phase of its tariff rationalization program to the committee, with the average tariff rate projected to decline from 16.56 percent to 13 percent during the upcoming fiscal year . The maximum customs duty rate will remain capped at 50 percent, while additional customs duties and regulatory duties will undergo phased reductions across numerous tariff lines .
The National Assembly Standing Committee on Finance, chaired by PPP’s Syed Naveed Qamar, approved amendments to customs laws granting special judges the authority to freeze assets of accused individuals in money laundering cases .
