Islamabad:
The federal cabinet has approved the import of 500,000 tonnes of sugar, derogating 53% in import duties to offset the negative effect of its previous decision to allow sugar exports despite objections from the Ministry of Finance.
The cabinet waived all duties and taxes on the import of sugar, which has also made the Ministry of Finance, according to the Ministry of Finance’s sources.
The decision to waive taxes by disregarding the Ministry of Finance was first made during a meeting that chaired Vice Prime Minister Ishaq Dar, according to the ministry’s sources. The cabinet subsequently monitored the summary that was moved by the Ministry of National Food Security.
The cabinet made the decision without discussing the matter as a regular agenda and approved it instead through the circulation of summary. The rules allow the disposal of cases through circulation.
Due to emergency in foods, the federal cabinet has enabled the import of 500,000 tonnes of sugar to stabilize local prices with immediate effect, said Rana Tanveer Hussain, the federal minister of national food security and research while talking to Express Pakinomist.
Rana Tanveer said the central bank will deliver the cash line to the trading company in Pakistan for the import of sugar.
The development came on the heels with rising sugar price, which according to the Pakistan Bureau of Statistics was registered for RS196 per year. Kg last week. Prices were at RS138 per Kg before sugar exports.
Without waving taxes and duties, the landed price of sugar was estimated at RS245 per day. Kg. After exempting these taxes, the landed price is estimated at RS153 per year. Kg excl. Shipping prices.
During the last meeting of the Economic Coordination Committee for the Cabinet, the Financial Secretary had refused to waive the tax or grant. This time, the government did not bring the summary in the ECC and got it directly approved from the federal cabinet.
The government’s decision on earlier allows export of 765,000 tonnes of sugar is said to be the main reason for the price increase from RS138 to RS196 per year. Kg. However, the Minister of Food said the situation arose after a million tonnes of low production of sugar due to climate change, which affected the crops this year.
“The cabinet considered a summary dated July 4, 2025, submitted by the National Food Security and Research Division, circulated to imports of white crystalline sugar to ensure food security and stabilize sugar prices and approved the proposal” according to the cabinet decision.
The cabinet approved the import of sugar by giving up all applicable taxes at 53%, excluding provincial excise duty. The federal cabinet exempted 18% VAT, 3% additional VAT, 6% income tax, 20% Custom Customs and 6% Further Custom Customs.
The Minister of Information Attaullah Tarar did not answer a question of whether the cabinet approved the tax exemptions.
The Ministry of Finance alerted
The sources said the Ministry of Finance has agitated the Cabinet’s decision and informed the Prime Minister’s office that it could affect Pakistan’s international obligations.
Pakistan has also given international obligations that it would not acquire agricultural goods according to the Ministry of Finance’s officials. They have warned to the Prime Minister’s office that the implementation of the Cabinet’s decision may cause problems to meet international obligations.
A cabinet minister on condition of anonymity said the tax is waived by invoking the food’s emergency and therefore the decision should not go against any international obligations.
Finance Minister Muhammad Aurangzeb did not answer questions whether the ministry took the question of tax exemptions with the Prime Minister’s office.
In a press release, the Ministry of National Food Safety said that all necessary events for the Sugar Import Initiative have been completed and immediate implementation is already underway.
The ministry emphasized that the current government had previously allowed sugar exports when there was ample domestic supply, demonstrating a balanced policy to control the market dynamics. By approving sugar imports, the administration now aims to keep prices stable and protect consumers from sudden hiking.
According to the Pakistan Bureau of Statistics, the country exported 765,734 tonnes of sugar between July and May in the last financial year and earned RS114 billion. This marks an increase of 2,200% in sugar exports compared to the same period last year.
Exports first and then decide to import have given rise to concern about the government’s conflicting policy and the unfavorable attitude imposed on consumers. After export, the domestic sugar prices hit a record RS190 per year. Kg – RS58 higher than the pre -export price.
In March, the government had set the retail price for sugar for RS164 per year. Kg – 13% higher than CAP -set up during the export approval period – which allowed Møller to enjoy windfall gains in both local and export markets.
The government had negotiated the ex-factory and retail prices on sugar with Pakistan Sugar Mills Association (PSMA), which has previously been accused of cartel-like behavior of the country’s antitrust-watch-dog-Pakistan’s Competition Commission. Despite the agreed rates, the government failed to secure stable retail prices.
