ISLAMABAD - As budget proposals for fiscal policy 2010-2011 have started pouring into the Finance Ministry, the Federal Board of Revenue has recommended withdrawal of regulatory duty on as many as 400 items for the next financial year. According to well-placed sources, the FBR has advised the government to withdraw additional regulatory duty of up to 25 per cent on most of the luxury items. However, regular import duties and other tax regimes would be applicable to these items even after withdrawal of regulatory duty, the sources added. Proposing the withdrawal of regulatory duty on most of the 400 items, the FBR has argued that this additional levy has been encouraging smuggling rather than becoming an instrument to collect extra revenues. Therefore, the regulatory duty should stay on those items that necessitate such measures for the protection of the local industry, the sources added quoting officials of the FBR. The sources were of the view that the misuse of the Afghan Transit Trade facility has forced the FBR to propose the withdrawal of the regulatory duty in the next financial year starting July 2010. The regulatory duties were making these items prices way higher than that in neighbouring Afghanistan. Therefore, ten to 20 per cent price differential was a lofty margin for smugglers that too in proximity to a war ridden 2250-kilometre porous border with Afghanistan.