Islamabad:
The federal cabinet has approved the import of 500,000 metric tons of sugar, renouncing 53% in import taxes to compensate for the negative impact of its previous decision to allow sugar exports despite the objections of the Ministry of Finance.
The cabinet renounced all tariffs and tax import taxes, which has also made the Ministry of Finance nervous, according to the sources of the Ministry of Finance.
The decision to renounce taxes annulling the Ministry of Finance was taken for the first time during a meeting chaired by the Vice Prime Minister Ishaq, according to the sources of the Ministry. Subsequently, the cabinet examined the summary moved by the Ministry of National Food Security.
The cabinet made the decision without discussing the matter as an element of regular agenda and, on the other hand, approved it through the circulation of the summary. The rules allow the elimination of cases through circulation.
Due to the emergency of food, the federal cabinet has allowed the importation of 500,000 metric tons of sugar to stabilize local prices with immediate effect, Rana Tanveer Hussain said, the federal minister of National Food Safety and Research while speaking with the Express PAkGazette.
Rana Tanveer said the Central Bank will provide the cash line to the Commercial Corporation of Pakistan for the importation of sugar.
The development occurred immediately after the increase in the price of sugar that, according to the Pakistan statistics office, were recorded in RS196 per kilogram last week. The prices were RS138 per kg before the export of sugar.
Without exhausting taxes and tariffs, the sugar price had been estimated at RS245 per kilogram. After exempting these taxes, the price of the land is estimated at RS153 per kg, excluding load prices.
During the last meeting of the Economic Coordination Committee of the Cabinet, the Secretary of Finance had refused to resign of taxes or give subsidies. This time, the government did not bring the summary in the ECC and approved it directly from the federal cabinet.
It is said that the government’s decision to allow the export of 765,000 metric tons of sugar is the main reason for the increase in RS138 prices to RS196 per kg. However, the Food Minister said the situation arose after one million tons of low sugar production due to climate change, which impacted crop yield this year.
“The cabinet considered a summary of July 4, 2025, presented by the National Division of Food Security Security and Research, which was distributed, for the importation of white crystalline sugar to guarantee food security and stabilize sugar prices and approve the proposal” according to the decision of the cabinet.
The cabinet approved the importation of sugar by giving up all applicable taxes, which are 53%, excluding provincial special taxes. The federal cabinet exempt 18% of the sales tax, 3% of the additional sales tax, 6% of the income tax, 20% of the custom and 6% additional taxes.
Information Minister Attaullah Tarar did not answer a question if the cabinet approved tax exemptions.
Alarmed Ministry of Finance
The sources said the Ministry of Finance has stirred the decision of the cabinet and informed the office of the Prime Minister that Pakistan’s international commitments could affect.
Pakistan has also provided international commitments that he would not obtain agricultural products, according to the officials of the Ministry of Finance. They have warned to the prime minister’s office that the implementation of the cabinet decision can create problems to comply with international commitments.
A cabinet minister under anonymity said that taxes have been withdrawn by invoking food emergency, therefore, the decision should not go against any international commitment.
The Minister of Finance, Muhammad Aurengzeb, did not answer the questions if the ministry dealt with fiscal exemptions with the prime minister’s office.
In a press release, the Ministry of National Food Security said that all the necessary agreements have been completed for Sugar import initiative, and that the immediate implementation is already underway.
The Ministry stressed that the current government had previously allowed sugar exports when there was a wide national supply, demonstrating a balanced policy to administer market dynamics. Now, by passing sugar imports, the administration aims to maintain stable prices and protect consumers from sudden walks.
According to the Pakistan Statistics Office, El País exported 765,734 metric tons between July and May of the last fiscal year, winning RS114 billion. This marks a 2,200% increase in sugar exports compared to the same period last year.
Export first and then decide to import has caused concerns about the contradictory policies of the government and the disadvantageous position imposed on consumers. After exports, national sugar prices reached a record of RS190 per kilogram, RS58 higher than the price prior to exporting.
In March, the Government had set the retail price of sugar in RS164 per kilogram, 13% higher than the limit established during the export approval period, allowing mills to enjoy unexpected profits in local and export markets.
The Government had negotiated the ex-faactive and retail prices of sugar with the Association of Sugars Mills of Pakistan (PSMA), which was previously accused of behavior similar to the poster by the Nation’s antimonopoly control agency: the Pakistan Competition Commission. Despite the agreed rates, the government failed to guarantee stable retail prices.
