ISLAMABAD - The PTI-led government is mulling to reduce the duties on imported raw materials to enhance the country’s exports in the upcoming mini budget, which would be presented in National Assembly on January 23.

The government in upcoming mini budget would focus on supporting export sector in a bid to reduce the trade deficit of the country, background discussions with the officials of ministry of finance and commerce revealed. “The government is likely to reduce the customs duties on raw materials used by export industries,” said an official of the ministry of commerce. He further said that government would also rationalize tariffs structure and customs duties in the next mini-budget to facilitate the growth of industrialization.

The country’s exports could not increase as compared to the rupee depreciation. The exports have increased by only 1.7 percent during first half of the FY2019 as against the 18 percent depreciation in local currency against the US dollar. Therefore, the government is mulling other measures in the mini budget to boost the exports of the country.

Finance Minister Asad Umar on Saturday said that government would present the mini budget in National Assembly on January 23. This would be the second mini budget of PTI led government in its less than five months tenure. Earlier, the government had presented the mini budget in September 2018. However, the mini budget had not helped the government in increasing the tax collection. The tax collection shortfall had reached Rs170 billion. The Federal Board of Revenue (FBR) had collected net revenue of over and above Rs 1,779 billion during first half (July-December) of 2018-19 against target of Rs 1,949 billion, reflecting a shortfall of Rs 170 billion.

In revenue measures, the government is considering several options in the next mini budget. The proposals, which are currently under consideration, included increase in sales tax on petroleum products, enhancing Federal Excise Duty (FED) on several commodities like cement, beverages, cigarettes and vehicles (1600cc and above). Similarly, another option of imposing FED on usage of cellular phone is also under consideration through upcoming mini-budget to increase tax collection. The government is also contemplating to increase the rate of additional customs duty - from 2 to 3 percent - on imports and further increase the rate of withholding taxes for non-filers.

The government is eying to generate Rs150 billion from the mini budget in order to reach the revised tax collection target of the country.  In September 2018, the PTI led coalition government had downward revised the tax collection target by Rs45 billion for the ongoing fiscal year 2018-19 despite taking additional taxation measures. The previous PML-N government had set the tax collection target for Federal Board of Revenue (FBR) at Rs4435 billion for the current financial year. However, the PTI government had downward revised the target to Rs4390 billion despite introducing additional taxation measures.