ISLAMABAD 24th June: The government announced on Monday that it would launch a crackdown on the sugar millers involved in hoarding to jack up prices artificially in order to pocket billions of rupees from consumers.
The price hike came after the government increased general sales tax on sugar from 8% to 17% while announcing the federal budget for 2019-20. However, the sugar millers have already increased prices without waiting for approval of the budget by parliament, which is currently debating the budget.
Briefing a special committee of the National Assembly Committee on Agriculture Products, in a meeting chaired by National Assembly Speaker Asad Qaiser, Minister of State for Revenue Hammad Azhar said the government would conduct raids on sugar mills, which had hoarded the commodity and increased prices artificially.
“No new tax has been imposed on flour and ghee in the budget,” he emphasised while dismissing talk of influence of different lobbies on budget preparation.
Adviser to Prime Minister on Commerce Abdul Razak Dawood told the special committee that an artificial increase in sugar prices had been made, adding that cotton growers had switched to sugarcane crop for achieving better returns.
Hammad also talked about tax levy on the cigarette manufacturing industry, saying it would generate revenue of Rs140 billion in the upcoming fiscal year 2019-20. In the current year, he said, the government expected collection of Rs115 billion worth of revenue from the cigarette industry.
He pointed out that the increase in tax on tobacco crop had been withdrawn in a bid to provide relief to the growers. However, the tax rate had been increased on cigarette packs.
An increase of Rs14 has been made in the federal excise duty on a cigarette pack in category one and the duty has been raised by Rs8 in category two. The commerce adviser, while backing the textile barons, criticised the government for abolishing the zero-rated sales tax facility. He also opposed the re-imposition of duty on cotton import in order to provide relief to the textile millers.