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ISLAMABAD: The Public Accounts Committee (PAC) has asked the FBR to submit details about the owners of sugar mills. The committee also asked who allowed the export of sugar, which mills exported how much, and to which countries. All this information must be provided by next week.
A meeting of the PAC was held Wednesday under the chairmanship of Junaid Akbar, during which the current sugar prices in the country were discussed.
Last week, the PAC had taken notice of the FBR’s notification that approved tax exemptions on sugar imports, following a government decision. In response, the Chairman of the FBR was summoned to explain the SRO.
Appearing before the committee, FBR Chairman Rashid Mahmood Langrial revealed that, on the instructions of the Cabinet, four types of taxes were reduced to facilitate the import of 500,000 tons of sugar. Taxes were brought down from 18% to just 0.2%.
According to DawnNews, the Secretary for Food Security briefed the committee that the retail price of sugar was Rs177 per kg in Punjab, Rs180 in Sindh, Rs185 in Khyber Pakhtunkhwa, and Rs183 in Balochistan.
Committee member Moeed Pirzada said the “sugar mafia” is beyond the control of provincial governments. “Can Murad Ali Shah or Maryam Nawaz take action against them?” he questioned. He pointed out that the Sugar Advisory Board includes all sellers but no representation from consumers.
The Secretary further informed that last year, 750,000 tons of sugar were exported, while this year the government initially planned to import 500,000 metric tons. That decision has now been revised to 300,000 metric tons.
PAC Chairman Junaid Akbar raised concerns about policy decisions being made to please the IMF. “Did you also seek IMF’s approval to protect the wealthy sugar producers?” he asked.
The Secretary of Food Security said that 5.8 million metric tons of sugar were produced this year, which matches the country’s annual consumption. The committee questioned who decided to first export sugar and then import it.
In response, the Secretary said the decision was made by the Federal Minister for National Food Security, Rana Tanveer Hussain, and approved by the Cabinet. He added that the average retail price of sugar in the country is Rs183 per kg.
Committee member Naveed Qamar suggested that instead of interfering in sugar prices, the government should focus on controlling cartels. He criticized the role of the Competition Commission and noted that the country’s largest cartels exist in the sugar and fertilizer sectors. He said government interference only benefits these cartels.
The Secretary told the committee that there was a sugar stock of 1.3 million tons at the start of the season, and permission for export was granted to protect farmers. Committee members, however, expressed concern over this reasoning.
PAC Chairman Junaid Akbar remarked that the permission to export sugar was given to make a few sugar mill owners billionaires. The committee then postponed the sugar issue discussion until next week.
It is worth noting that the Federal Cabinet had approved the export of an additional 500,000 metric tons of sugar on the condition that sugar mills begin production from November 21, 2024.
According to Jang News, FBR Chairman Rashid Langrial told the committee that matters of food import and export fall under the Ministry of Food. He said the decision to import sugar was made by the Cabinet, and the FBR is bound to follow such decisions.
PAC Chairman Junaid Akbar Khan criticized the FBR, saying, “What kind of drama is this? When it’s about public welfare, you hide behind the IMF, but for investors, even the IMF doesn’t matter. A few investors are being favored. We are the ones who get blamed.”
PAC member Khawaja Shiraz asked under what mechanism 750,000 tons of sugar were exported.
The FBR Chairman replied that the Ministry of Food handles such matters and that they were instructed to remove 20% customs duty on imports, reduce the 18% sales tax to 0.25%, and lower the 5.5% advance tax to 0.25%.
Chairman Akbar asked if the IMF wouldn’t raise concerns over this. The FBR Chairman responded, “Of course the IMF will raise concerns.”
Committee member Moeed Amir Pirzada commented that neither Murad Ali Shah has the authority to act against sugar mills in Sindh, nor Maryam Nawaz in Punjab. He proposed that licenses for sugar mills should be open so anyone can establish a mill.
Pirzada also questioned whether there is any consumer representation in the Sugar Advisory Board. In response, the Food Secretary said all relevant stakeholders are part of the board.
