Govt is all set to crackdown against sugar millers involved in price hike

  • In order to pocket billions of rupees from consumers, the government announced to launch a crackdown against sugar millers involved in price hike.
  • This year the government is going to collect RS115 billion worth of revenue from the cigarette industry.
  • PM’s Adviser on Commerce criticized the government for abolishing the zero-rated sales tax facility.
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Govt is all set to crackdown against sugar millers involved in price hike

Government has announced to launch a crackdown on the sugar millers involved in hoarding to jack up prices artificially to pocket billions from consumers.

The price hike came while announcing the federal budget 2019-2020 in which the government increased the general sales tax on sugar from 8% to 17%.

But the sugar millers have already increased prices without waiting for approval of the budget by parliament.

Also check: FBR Introduces ‘Online Tax Profiling System’ Enabling People To Check Their Tax Profile

Govt to conduct raids on sugar mills:

The Minister of State for Revenue, Hammad Azhar while briefing a special committee of the National Assembly Committee on Agriculture Products, said:

“The government will conduct raids on sugar mills, which had hoarded the commodity and increased prices artificially.”

He dismissed talk of the influence of different lobbies on budget preparation and said:

“There is no new imposed tax on flour and ghee in the budget.”

Tax levy on the cigarette:

The Minister also talked about tax levy on the cigarette manufacturing industry. He said it would generate revenue of RS.140billion in the upcoming fiscal year 2019-20.

“In the current year, the government is expected to collect RS115 billion worth of revenue from the cigarette industry,” he told.

In one category, an increase of RS14 has been made in the federal excise duty on a cigarette pack whereas, in the second category, the duty has been raised by RS8.

Prime Minister Adviser on Commerce Abdul Razak Dawood told the special committee about an artificial increase in sugar prices. He said that cotton growers had switched to sugarcane crop for achieving better returns.

He criticized the government for abolishing the zero-rated sales tax facility and opposed the re-imposition of duty on cotton import in order to provide relief to the textile millers.

The Adviser voiced concern over scrapping of the zero-rated facility for the five major export-oriented sectors in the budget. He further said that the textile sector should not be blamed and termed it a wrong decision and asked where the textile industry would go now.

The duty that had been earlier imposed on cotton was 1% which is now hiked to 10%, he pointed out.

Restoration of duty on cotton import:

The Commerce Minister has opposed the restoration of duty on cotton import. He believes that it would create a positive impact on the export of textiles.

The national food security secretary said that cotton prices had remained subdued for the past 10 years and farmers were denied the due price for their produce.

“Duties on cotton import are removed when prices in the domestic market start rising. Farmers are discouraged by lower prices,” he said.

Riaz Fatiana, the committee member, protested the grant of incentives to the cartel of sugar producers, car manufacturers, all Pakistan Textile Mills Association, and fertilizer producers.

25 out of 27 recommendations made by the special agriculture committee had been rejected, he revealed.

“I walk out of the committee to register a protest,” he said and demanded that the government dissolve the finance ministry and the Federal Board of Revenue.

 

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