PAKISTAN has
embarked on multi-facet fiscal reforms that include simplifying customs tariff
structure, eliminating income tax and customs sops and widening the income
tax net and tax compliance.
It has shared broad contours of its indirect taxes and direct taxes
reforms with International Monetary Fund (IMF) under the framework of
restructuring loan availed under the latter's Extended Fund Facility.
While discussing its trade policy reforms, Pakistan Government says
it simplifying tariff rates and eliminating the statutory regulatory
orders (SROs) that establish special rates and/or nontariff trade
barriers in some 4,000 product areas. It is also improving trade
relations. It believes that these initiatives should deliver the much
needed competitive environment.
This and a slew of other tax reforms are mentioned in a document
captioned ‘Pakistan: Letter of Intent, Memorandum of Economic and
Financial Policies, and Technical Memorandum of Understanding.' IMF
released this document on 3rd January 2014.
The Letter of Intent (LOI) says: "We
are working on simplifying the tariff structure to move to a simple,
transparent framework, with 4 slabs between 0 and 25 percent rates with
few exceptions. Design of the new system would be completed by
end-December 2013; with phase-in of the revised tariff rates and
phase-out of trade SROs beginning by end-June 2014. Implementation of
the new tariff structure would be completed by end-June 2017."
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