ISLAMABAD: The Federal Board of Revenue (FBR) has announced an exemption on sales tax and value-added tax (VAT) for the import of 500,000 metric tons of white sugar, aiming to stabilize market prices and provide relief to consumers.
On Friday, the FBR issued a notification under SRO 215(I)/2021 in line with the Economic Coordination Committee’s (ECC) decision made on January 20, 2021. This measure was taken to facilitate the general public by reducing tax burdens on sugar imports, ensuring lower retail prices. The federal cabinet approved the decision on January 26, 2021, reinforcing the government’s commitment to consumer welfare.
According to the SRO, the FBR has granted the following exemptions:
— A full exemption from the 17 percent sales tax and the minimum three percent value-added tax (VAT) as specified under the 12th Schedule to the Sales Tax Act, 1990. This applies to the import and subsequent supply of 500,000 metric tons of white sugar by the Trading Corporation of Pakistan during the ongoing season.
— A waiver on the minimum value-added tax (VAT) at the rate of three percent on commercial imports of white sugar until June 30, 2021, as specified under the 12th Schedule to the Sales Tax Act, 1990.
The FBR has reiterated that these exemptions are designed to facilitate sugar imports, ensuring sufficient supply in the domestic market and stabilizing retail prices. The reduction in sales tax and VAT is expected to help mitigate inflationary pressures and provide economic relief to consumers.
Market analysts believe that the FBR’s move will have a significant impact on the pricing structure of white sugar, particularly as Pakistan experiences fluctuations in domestic sugar production. The removal of sales tax and VAT on sugar imports will encourage private importers to participate in stabilizing the market while reducing the financial burden on consumers.
As part of its broader strategy, the FBR continues to implement policies aimed at rationalizing tax structures to maintain economic stability. With this sales tax exemption, the FBR is ensuring that essential commodities remain accessible and affordable for the general public while promoting fair trade practices in the sugar market.
The decision reflects the government’s commitment to economic relief measures, and the FBR will continue to monitor market trends to ensure that the benefits of sales tax and VAT exemptions translate into tangible price reductions for consumers.