Traders demand edible oil tax waiver

Traders demand edible oil tax waiver

KARACHI:

The business community has called upon the government to withdraw all taxes and duties on edible oils to mitigate the surge in food inflation.

In a statement on Monday, Federation of Pakistan Chamber of Commerce and Industries (FPCCI) President Mian Nasser Hyatt Maggo expressed concerns over surging prices of food commodities in the country and cited that many items were out of the affordability of the common man.

Highlighting that edible oil prices were a major contributor in food inflation in Pakistan, he urged the government to act decisively to control inflation which was in the national interest.

If the government withdrew customs duty of Rs9,180 per ton, 17% federal excise duty (FED), 2% additional customs duty, 5-6% adjusted sales tax after value-addition and 2% income tax for just six months, edible oil prices would decrease by 25-30% immediately.

Resultantly, there would be a downward balancing effect on the overall food inflation, he added.

Maggo requested Adviser to the Prime Minister on Finance Shaukat Tarin to devise a pragmatic plan in consultation with edible oil manufacturers to bring down oil prices instantly.

Echoing his views, FPCCI Vice President Nasir Khan highlighted that regional countries had kickstarted withdrawal of sales tax, import duty and other levies on edible oils in a bid to provide relief to the general public.

He urged the government to take timely decision to control food inflation and stabilise rupee-dollar parity to protect the lower segment of the country.

He lamented that the price of edible oil had already crossed Rs390 per kg mark and it would continue to rise if the government did not intervene. “The leadership is in a position to offer relief of around Rs75 per kilogram to the people on account of waiver of taxes and duties,” he added.

Read ACD on edible oil, vehicles cut by 5%

In comments to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas highlighted that food inflation increased by 10% in September 2021 on a year-on-year basis.

He said that the total weight of all food commodities in the consumer price index (CPI) basket amounted to around 35%.

The CPI basket comprises of fixed set of consumer products and services whose price is evaluated on a regular basis, often monthly or annually, to calculate inflation.

“Going forward, the government needs to control food prices to contain the overall inflation,” Abbas said.

Union of Small and Medium Enterprises (Unisame) President Zulfikar Thaver lamented that the country was facing record high level of inflation.

“The government has acknowledged the spike in inflation however it gave invalid reasons for it,” he said.

He also emphasised the need to import edible oils on zero duty.

Prime Minister’s Economic Advisory Council member Dr Abid Qaiyum Suleri was of the view that the demand of withdrawal or reduction of duties on edible oils was “quite justified”.

“India has already withdrawn the import duty on palm oil,” he said. “Amid high energy inflation, this step will provide some relief to the masses.”

Food inflation has a regressive impact, he detailed adding that it negatively impacted the lower-income earners.