On Thursday, it was announced that the ban imposed on imports will be lifted in order to meet the final requirement of the IMF before the much-anticipated tranche is released. However, despite the three-month-old ban being removed, it will be quite difficult to import these luxury and non-essential goods as the government plans on imposing regulatory and customs duties ranging between 300 to 600 percent. This will perhaps be more beneficial for the economy as it will also help raise revenues because the ban had a moderate effect on limiting imports, and many of the items were still being found on the market through illicit means. While authorities maintain that the purpose of enhancing duties is not to raise additional revenues, the government would nevertheless earn up to Rs14 billion from these import duties.

Finance Minister Miftah Ismail has also stated that taxes will be further increased on cigarettes by 11 percent and on green leaf by 3,700 percent to help raise Rs 36 billion in revenue to pay for the deficit arising from tax concessions given to traders. This makes sense considering how cigarettes are already significantly undertaxed in the country compared to global standards.

https://www.nation.com.pk/05-Oct-2022/gold-bounces-back-in-pakistan-as-price-rises-by-over-1-percent

With regards to the items that will be subjected to these duties, FM Ismail said that the government is going to impose up to 600 percent duties on cars, making it impossible to import vehicles. The Minister is right in pointing out that we need to get our priorities right and this is not the time to be spending foreign exchange on Mercedes cars. The heavy duties will be imposed on other completely built-up (CBU) commodities as well such as mobile phones and electronic appliances. In addition to this, imported fish, meat, fashion goods, and other luxury items will also be subjected to these duties.

At the same time, it is good to see that this decision will not disrupt key industries as there will be no restrictions on industrialists importing machinery to manufacture items for exports, or even on the import of spare parts in limited quantities. While these measures may seem painful or inconvenient to some, such decisions are the need of the hour as we urgently need to raise additional revenue and reduce our current account deficit.