Islamabad:
The federal office has approved the importation of 500,000 metric tonnes of sugar, renouncing 53% of import taxes to compensate for the negative impact of its previous decision to authorize sugar exports despite objections from the Ministry of Finance.
The cabinet has renounced all rights and taxes on the import of sugar, which also rendered the Ministry of Finance Jittery, according to the sources of the Ministry of Finance.
The decision to renounce taxes by announcing the Ministry of Finance was taken for the first time at a meeting chaired by Vice-Prime Minister Ishaq Dar, according to the sources of the ministry. The cabinet subsequently verified the summary moved by the Ministry of National Food Security.
The cabinet made the decision without discussing the question as an order for the agenda and rather approved it by the circulation of the summary. The rules allow the elimination of cases by circulation.
Due to the food emergency, the federal office has enabled the importation 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 speaking at L’Express PK Press Club.
Rana Tanveer said that the central bank will provide the cash line to the company of Pakistan for the import of sugar.
The development increased the prices of sugar which, according to the Pakistan Bureau of Statistics, were recorded in Rs196 per kilogram last week. The prices were at Rs138 per kg before the export of sugar.
Without waving taxes and rights, the price of the land landed had been estimated at RS245 per kilogram. After having exempt these taxes, the terrestrial price is estimated at RS153 per kg, excluding freight prices.
During the last meeting of the economic coordination committee of the cabinet, the finance secretary refused to give up taxes or give subsidies. This time, the government did not bring the summary to the ECC and made it directly approved by the federal cabinet.
The government’s decision to authorize the export of 765,000 tonnes of metric sugar earlier is the main reason for the price increase from RS138 to Rs196 per kg. However, the Minister of Food said that the situation had emerged after a million tonnes of low sugar production due to climate change, which had an impact on crop yield this year.
“The cabinet considered a summary dated July 4, 2025, submitted by the National Food Security and Research Division, which was distributed, for the import of white crystalline sugar to ensure food security and stabilize the prices of sugar and approved the proposal” according to the firm’s decision.
The cabinet has approved the import of sugar by renouncing all applicable taxes, which are 53%, excluding provincial accused. The federal firm exempt the sales tax by 18%, 3% additional sales tax, 6% income tax, 20% customs duties and 6% additional customs duties.
The Minister of Information, Attaullah Tarar, did not answer the question of whether the cabinet approved tax exemptions.
The Ministry of Finance has alarmed
The sources said that the Ministry of Finance had agitated the decision of the cabinet and informed the Prime Minister’s office that he could have an impact on international commitments in Pakistan.
Pakistan has also given international commitments that it does not provide agricultural products, according to officials from the Ministry of Finance. They warned the PM office that the implementation of the firm’s decision could create problems to respond to international commitments.
An anonymity cabinet minister said taxes had been canceled by invoking the food emergency, so the decision should not go against international commitments.
The Minister of Finance Muhammad Aurangzeb did not answer questions if the ministry took the issue of tax exemptions with the Prime Minister’s office.
In a press release, the Ministry of National Food Security said that all the necessary provisions for the sugar import initiative had been completed and that immediate implementation is already underway.
The ministry stressed that the current government had previously allowed sugar exports when there was a sufficient internal supply, demonstrating a balanced policy to manage market dynamics. Now, by approving imports of sugar, the administration aims to maintain stable prices and protect consumers from sudden hikes.
According to the Pakistan Bureau of Statistics, the country exported 765,734 metric tonnes of sugar between July and May last year, earning 114 billion rupees. This marks a 2200% increase in sugar exports compared to the same period last year.
Export first and then the decision to import has aroused concerns about government contradictory policies and the disadvantageous position imposed on consumers. After exports, the prices of inner sugar reached an RS190 record per kilogram – RS58 greater than the price before export.
In March, the government had fixed the retail price of sugar to RS164 per kilogram – 13% higher than the ceiling set during the export approval period – allowing the thousands to benefit from interruption gains on local and export markets.
The government had negotiated ex -factor prices and sugar retail prices with Pakistan Sugar Mills Association (PSMA), which has already been accused of behavior similar to a cartel by the country’s antitrust guard dog – the Competition Commission in Pakistan. Despite the agreed prices, the government has not guaranteed stable retail prices.
