Tariffs on Pakistan by Pakistan?

“Tariffs on Pakistan by Pakistan” is not standard and is likely a misinterpretation. Pakistan does not impose tariffs on itself in the international trade sense.

However, this phrase can be accurately understood in two main ways:

1. Domestic Tariffs and Taxes: This refers to taxes and duties the Pakistani government imposes on goods and services within its own country, paid by its own citizens and businesses.

2. Pakistan’s Import Tariffs on Other Countries: This refers to the standard taxes Pakistan levies on goods imported from other nations. In this case, the tariffs are “by Pakistan” but are “on” goods coming from China, the USA, etc., not on Pakistan itself.

This analysis will focus on the first meaning, as it directly addresses the unusual wording of your query.

Domestic Tariffs and Taxes in Pakistan

The Pakistani government imposes various taxes and duties on economic activity within its borders. These are primary tools for generating government revenue and for protecting local industries from cheaper foreign competition.

Key Types of Domestic Levies:

• Customs Duty: A tax on goods when they are imported into Pakistan. While it’s applied at the border, its cost is passed onto Pakistani consumers and businesses inside the country, making foreign products more expensive.

• Sales Tax: A consumption tax (typically 17%) levied on the sale of goods and services within Pakistan. It is ultimately paid by the end consumer.

• Income Tax: A direct tax levied on the income of individuals and corporations operating within Pakistan.

• Regulatory Duty (RD): An additional duty imposed on imports to regulate the trade of certain goods and protect domestic sectors.

• Additional Customs Duty (ACD): Often applied in lieu of sales tax on imported goods.

10 Fact-Oriented Examples of Pakistan’s Domestic Tariffs & Taxes

1. Automotive Industry Protection: Pakistan imposes high tariffs (customs duty + additional duties) on imported completely built-up (CBU) cars. Fact: This makes foreign cars like Toyotas or Hondas significantly more expensive, a policy designed to protect local car manufacturers like Pak Suzuki, Toyota Indus, and Honda Atlas.

2. Agricultural Sector Support: To protect local farmers, Pakistan tariffs imports of certain agricultural products. Fact: The government has historically imposed high regulatory duties on the import of potatoes, tomatoes, and other vegetables when local harvests are in season to prevent price collapses.

3. Textile Industry Inputs: The complex tax regime impacts key industries differently. Fact: While finished textile imports might have tariffs, the local textile industry has long lobbied for zero-rated tariffs on imported raw materials and machinery to keep their production costs competitive for export.

4. Mobile Phones and Electronics: To encourage local assembly and generate revenue, Pakistan taxes imported phones. Fact: The government implemented a device identification registration system (DIRS) and taxes on imported phones based on their value, making foreign-branded smartphones more expensive for Pakistani consumers.

5. The “Luxury Goods” Tax: The government uses tariffs to discourage the import of non-essential goods. Fact: High regulatory duties are often placed on items deemed as luxuries, such as high-end cosmetics, jewelry, and sports cars, to conserve foreign exchange reserves.

6. Fiscal Needs and the IMF: Tariff and tax policies are often driven by the need for revenue, especially under international loan agreements. Fact: As part of its agreement with the International Monetary Fund (IMF), Pakistan has committed to broadening its tax base and increasing revenue, which can lead to higher taxes and duties on various goods and services domestically.

7. Energy Sector Taxes: Pakistani citizens pay various taxes on energy consumption. Fact: Bills for electricity and natural gas include multiple lines of taxes, including sales tax, petroleum levy, and income tax, which significantly increase the final cost for households and industries.

8. Sugar Import Dilemma: To protect powerful domestic sugar mill owners, the government manipulates tariffs. Fact: Despite domestic shortages and high prices, the government has been hesitant to allow tariff-free imports of sugar, as it would undercut the profits of local producers.

9. Protection for Steel Industry: The local steel industry is shielded from foreign competition. Fact:Pakistan imposes a 20% customs duty on the import of certain steel products, alongside other taxes, to protect domestic steel mills from cheaper imports, primarily from China.

10. Duty on Renewable Energy Equipment: Policy choices affect green energy adoption. Fact: While promoting renewable energy, Pakistan still imposes customs duties and taxes on imported solar panels and related equipment, increasing the cost of transition to solar power for its citizens and businesses.