Miftah Ismail defends ban on luxury items import

Attributes dollar depreciation to market factors

By: News Desk
Published: 02:05 PM, 6 Aug, 2022
Miftah Ismail defends ban on luxury items import
Caption: TV grab.
Stay tuned with 24 News HD Android App
Get it on Google Play

Finance Minister Miftah Ismail has said that government will not remove ban on the import of luxury items for the betterment of economy, reported 24NewsHD TV channel.

Addressing the Karachi Chamber of Commerce and Industry (KCCI) on Saturday, the finance minister said that the government imposed ban on luxury items for the improvement of economy. He refused to lift ban on the import of mobile phones, home appliances and vehicles.

“We have imposed a ban on CPU cars, mobile phones and home appliances which we will not remove till September. However, the minister said authorities were working on identifying items used by exporters for manufacturing products and their import would not be stopped.

He assured that the government had not stopped payments on any letters of credit that had been opened in the past and would not do so in the future as well.

The minister noted that the country’s imports last year stood at $80 billion while its exports were a mere $31bn. The country’s current account deficit was $17.5bn while the trade deficit, after subtracting the remittances, stood at $18bn, he said.

“If you create such a wide deficit, there will be pressure on your rupee. Today, Bangladesh has increased the price of petrol to 308 (per litre). They are also under pressure. There is a very challenging environment globally.”

He said he felt ashamed when he had to meet the ministers of other countries and ask them for loans. He said when he was in Sri Lanka, he vowed that he would not go to the IMF. But we were giving subsidies worth $500bn on petrol and were not exporting at all. We have to go to Saudi Arabia and UAE and ask them to deal with the IMF, he confessed.  

Yesterday, while addressing a ceremony at the Pakistan Stock Exchange (PSX), Miftah said that the government would control imports for the next three months, even if it came at the cost of slower growth.

"I will not allow imports to increase for three months and, in the meantime, we will come up with a policy. I understand that growth will be reduced for a bit but I have no other choice," he said. 

The finance minister said that some banks cooperated and some banks suffered losses. He warned the small banks of consequences if they did not comply with the government order. 

He said that government tried hard to bring the rate of dollar down. But, at the same time, he confessed that neither the State Bank of Pakistan nor he had directly intervened to bring the exchange rate of US dollar down as the ‘rate adjusts itself following the mechanism of supply and demand’. 

He asked the traders to not import things through their open account. He said that traders would have to face the inconvenience till September for which he begged their pardon. 

“Give me three months. We are all in this together. Let me save this country from problems. Pakistanis will start importing again.”

The minister said there was no denying the fact that the country was left behind. “We have suggested imposing Rs3,000 tax on small traders,” he added. 

He said our first priority was saving the country from default. He said every retailer should have to pay tax. Pakistan has to pay Rs4,000 billion interest on loans this year, he added. 

 Yesterday, Miftah announced that the government had withdrawn the fixed tax on retailers in electricity bills for the moment, adding that a new action plan would be made after further consultations on the tax issue. 

Miftah Ismail said the national economy was moving in the right direction due to prudent policies of the government and steps were being taken to stabilize it.

He assured that problems of business community would be resolved on priority basis.

He urged the business community to extend cooperation to the government in its efforts to stabilize the national economy.

He said the government had to take tough decisions of withdrawing subsidies on petroleum products and power to bring the national economy on the right track.