Key Takeaways
- Additional customs duties raised on imported tyres and motorcycle parts.
- Finance Minister Muhammad Aurangzeb chaired the Economic Coordination Committee meeting.
- New duties aim to promote domestic manufacturing and provide financing support for small businesses.
The Economic Coordination Committee (ECC) of the cabinet has approved increased customs duties on imported tyres and motorcycle parts, effective from Thursday. The move is aimed at protecting domestic manufacturers and promoting local production.
According to an official statement, the additional customs duty on radial tyres has been raised from 4 percent to 11 percent, while the duty on motorcycle parts has been increased from 11 percent to 31 percent. These changes are specifically applicable to tyres and motorcycle parts produced locally.
Finance Minister Muhammad Aurangzeb chaired the meeting, which also approved a State Bank of Pakistan financing framework to expand access to credit for small and medium-sized enterprises, small farmers, and medium-sized industries. This framework will provide first loss coverage for up to 20 percent of loans to small and medium-sized enterprises and 10 percent each for small farmers and medium-sized industries.
The arrangement aims to broaden access to financing through wholesale and agency arrangements involving eligible microfinance and nonbank financial institutions. The committee also approved an amendment to the Credit Guarantee Trust Fund to expand the use of an existing credit guarantee facility for affordable housing finance, originally established for the Prime Minister’s Mera Pakistan Mera Ghar scheme.
The ECC's decisions are expected to have a significant impact on the prices of imported tyres and motorcycle parts, making them more expensive for consumers. However, the measures are also intended to support local industries and provide financial assistance to small businesses and farmers.
The government's actions reflect a broader strategy to bolster domestic manufacturing and ensure economic stability. By increasing duties and providing financial support, the ECC aims to create a more favorable environment for local businesses and farmers.
The decisions come at a time when the economy is facing various challenges, and the government is taking steps to address these issues. The ECC's approval of these measures is seen as a proactive approach to support the local manufacturing sector and provide financial assistance to small and medium-sized enterprises.
