International
prices of crude oil have touched US$ 21 per barrel recently. This will increase the oil
import bill of Pakistan, put additional pressure on limited foreign exchange reserves and
further increase the trade deficit. The development surcharge on POL products has been a
major source of revenue for the GoP. With the increase in oil prices, surcharge collection
is expected to go down considerably. The situation will force the GoP to increase POL
prices. The GoP is already charging higher prices and further increase will not be
justified.
CREDIT POLICY
A review of Pakistan's monetary policy and
credit expansion during 1998-99 shows that credit plan for the year was consistent with
the overall monetary policy objectives. PAGE analyzes the factors responsible for
meeting the target.
FEDERAL REVENUES
Tax to GDP ratio is on constant decline. Tax
policy has been based on adhocism and various incentives schemes have failed to achieve
desired boost to the economy. The structural weakness, low tax elasticity, over reliance
on indirect taxes and inefficiency of tax administration remains the key issues.
EDIBLE OIL
The edible oil prices, palm and soyabean oil,
dropped to a record low in the international market but it did not bring any relief to the
consumers in Pakistan as the government doubled the duty on imports of edible oil.Whether
it is edible oil or petroleum oil, the benefit was never passed on to the consumers.
GATT
The General Agreement on Tariff and Trade
(GATT) System for customs valuation is being enforced in Pakistan from 1st January 2000.
The ultimate target of introducing GATT valuation system at customs stage is aiming at
minimizing duty on imports to a level of zero-rated regime. The new system is bound to
help speedy economic growth by removing the bottlenecks faced by trade and industry at the
customs stage.
