The United States has formally requested Pakistan to exempt duties and taxes on security scanners it plans to install at Karachi port. These scanners aim to enhance the screening of US-bound export containers under the Container Security Initiative (CSI).
The Economic Coordination Committee (ECC) of Pakistan’s cabinet will review the US request next week. The requested exemption amounts to approximately $3 million (Rs317 million). Washington cites a bilateral agreement as grounds for the tax relief, according to a Federal Board of Revenue (FBR) official.
Under the $6.2 billion International Monetary Fund loan program, the federal government has withdrawn FBR’s authority to grant such exemptions. This authority now rests with the ECC in specific cases.
The US installed scanners at Port Qasim Karachi in 2007 under the CSI, a post-9/11 security program designed to prevent threats via maritime containers. CSI requires foreign ports to identify and inspect containers posing potential terror risks before shipment to the US.
FBR spokesperson Dr. Mohammad Iqbal confirmed the US approach to Pakistani authorities to exempt taxes on new, non-intrusive scanners to replace the existing equipment at Port Bin Qasim. The FBR has submitted a summary to the ECC for a decision, reflecting Pakistan’s commitment under the Declaration of Principle.
In addition, the ECC is set to decide on imposing a 40% regulatory duty on maize imports. The Ministry of National Food Security and Research suggests this to protect domestic producers from cheap foreign maize, noting a significant price gap between domestic and international markets.
The ministry highlights that domestic maize prices stand at Rs23,100 per metric ton, nearly 29.4% higher than the international price of Rs17,850. This discrepancy poses a risk of increased imports, which could harm Pakistan’s agricultural sector, especially amid a government relief package for farmers facing global price declines.
Furthermore, the ECC will determine the minimum wheat support price for the 2015-16 harvest. The Ministry of Food and Agriculture proposes maintaining the price at Rs1,300 per 40 kg due to surplus stocks and falling global wheat prices.
Estimates from the International Grain Council project an increase in world wheat production to 721 million tons in 2015 and rising wheat stockpiles, reinforcing price stability concerns.
