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The fiscal budget for 2018 – 19 was announced on April 27, 2018 which aims to bring more people under the tax net and increase the government’s earnings considerably. The government has set the fiscal year growth target at 6.2% against the target of 6% set for the current year. Government also announced 2 amnesty schemes a few weeks ago allowing people to declare assets within and outside the country at nominal tax rates of 2% to 5%. This measure is aimed at allowing people to bring most of their assets to Pakistan and increase the size of the economy.

The Chairmen of Pakistan Vanaspati Manufacturers Association (PVMA) and All Pakistan Solvent Extractors Association (APSEA) issued a joint letter to the Federal Bureau of Revenue suggesting not to change the existing duty structure on the import of oils and fats in the country as it provides a level playing field for all commodities. (Letter attached)

Following is the revised duty structure for the fiscal year 2018 – 19 with changes marked in red:

HS Codes Particulars Custom Duty
2017 – 18
Custom Duty
2018 – 19
1511.9020 RBD Palm Oil 9,180 9,180
1511.9030 RBD Palm Olein 7,692 7,692
1511.1000 Crude Palm Oil 6,800 6,800
1511.9010 RBD Palm Stearin 7,692 7,692
1513.2100 Crude Palm Kernel 7,692 7,692
1511.9090 Others 9,180 9,180
1507.1000 CD Soybean Oil 9,050 12,000
1512.1100 Sunflower Oil 15,000 15,000
1508.1000 Groundnut Oil 13,150 13,150
1509.1000 Olive Oil 5,000 5,000
1512.2100 Cottonseed Oil 15,000 15,000
1513.1100 Coconut Oil 9,050 9,050
1515.5000 Sesame Oil 9,050 9,050
1804.0000 Cocoa Butter Substitute 10,800 10,800
                     Additional Duties
1 PODB Cess Fund PKR 50/MT PKR 50/MT
2 Additional Custom Duty 1% 2%
2 Sales Tax / Central Excise Duty 16% 16%
3 Advance Income Tax 5.5% 5.5%
4 Federal Excise Duty PKR 1000/MT PKR 1000/MT
5 Warehousing Surcharge 0.25% 0.25%
Conversion US$ 01 = PKR 116

The government has however, increased the duty on import of CD soybean oil from existing PKR 9,050 PMT to PKR 12,000 PMT. According to government sources, this increase in the duty is aimed to protect locally produced soft oils. PVMA, in their earlier budget proposal had requested the government to increase the duty on the import of soybeans as it enjoys a lower duty as compared to imported edible oils.

The government has also increased the additional custom duty from 1% to 2% on import of all oils and fats across the board.

Impact of Increase in Soybean Oil Duty on Import of Palm Oil

The increase in the import duty of soybean oil will not have any impact on the import of palm oil as both oils are catering to completely different market segments. Palm oil imported in Pakistan is mainly used to manufacture vanaspati and is also a major feedstock of the food industry. However, the soybean oil imported in Pakistan is being used to cater to the soft oil market and is directly competing with locally produced soft oils.

The import of soybean oil in 2017 amounted to 221,150 MT which was 6.9% of the total import of oils and fats.

Following is the table of oils and fats import in 2017:


Commodity Jan – Dec 2016
Jan – Dec 2017
Changes Volume
Crude Palm Oil 115,348 121,815 6,466 5.61
Palm Oil 996,618 1,073,142 76,524 7.68
Palm Olein 1,301,212 1,634,537 333,325 25.62
Palm Fats 86,167 98,715 12,548 14.56
Soybean oil 152,098 221,150 69,051 45.40
Tallow 12,505 12,505 100.00
Total 2,651,443 3,161,863 510,420 19.25

Source: Shipping Agents’ Vessel Report

Financial Impact of Change in Duties

Based on the current commodity prices, the increase of PKR 3,000 PMT in the import duty of soybean oil and 1% increase in the additional custom duty would have the following additional financial cost on imports of the major edible oils in Pakistan:

Commodity                  Additional Cost

CD soybean oil              USD 41.18 per MT

RBD palm oil                 USD 8.12 per MT

RBD palm olein             USD 8.25 per MT





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