The reduction of duty on essential commodities as drought relief measure has caused a revenue loss of Rs. 73 billion for the country.
The Finance Ministry has already reduced several import taxes and other levies on 47 essential items in an effort to reduce the cost of living. This has caused a revenue loss of Rs. 23 billion for the government.
The recent reduction of taxes on commodities will deprive of Rs.50 billion in revenue in addition to Rs. 23 billion loss caused due to bringing down of import taxes and other levies on 47 essential food items.
The special commodity levy on imported rice, which was earlier Rs. 5 per kilo, has been further reduced to 0.25 cents on Tuesday and will be in force till December 2017 to tackle the rice shortage in the country owing to drought.
Special commodity levy (SCL) on imported fresh fish has been slashed by Rs. 50 as well and will be valid for the next three months.
From Tuesday the Finance Ministry removed all taxes on maize imports and instead imposed a SCL of Rs. 10 on each kilo of maize.
Several taxes including 15 percent Duty, 15 percent VAT, 7.5 percent PAL, 2 percent NBT and 35 percent CESS on maize meant as much as Rs. 60-75 of each kilo went to taxes. The simplifying of the taxes is expected to reduce prices for the poultry industry.
CESS on a kilogramme of imported flour has been reduced from Rs. 25 to Rs. 15 by 10 rupees Import taxes on wheat grain has also been reduced from Rs. 9 to Rs. 6.