Significant duty cuts on petrochemicals proposed in Budget 2005-06

09 Jun '05

2 min read

The budget brought cheers for local chemical manufacturers of Pakistan while ushering in protectionist measures by increasing customs duty on the import of 1,870 items, and imposing taxes on 16 other items proposed in the Budget 2005-06.

An increased slab of 15 percent besides four existing bands of 5 percent, 10 percent, 20 percent and 25 percent have been proposed for local industry and trade to prosper.

In a bid to rationalize tariffs, about 190 items (tariff lines) would be kept at 15 percent. As per Pakistan Customs Tariff (2005-06), duty reduceduction on MEG (polyester) from 20 percent to zero-percent; fibre 10-25 percent to 3 percent; polyester chip, 15 percent to 6.5 percent; polyester yarn, 20 percent to 7 percent; fabrics, 25 percent to 14 percent (one percent withholding tax would be levied and total incidence of taxes will be 15 percent), but viscose yarn will attract higher duty from 5% to 7%, in the budget proposals.

In the chemical and allied industry, duty reduction to the tune of 25 percent to 20 percent, 20 percent to 15 percent and 10 percent to 5 percent has been proposed for about 416 items.

For raw materials in the making of dyes and chemicals, 96 items have been identified for duties to rationalized in 5 percent, 10 percent, 15 percent and 20 percent slabs to promote indigenous industry.

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