Islamabad: Finance Minister Ishaq Dar on Wednesday (February 15) introduced the Finance (Supplementary) Bill, 2023, to raise PKR 170 billion in taxes to resume the International Monetary Fund (IMF) agreement, news sources reported.
The new finance bill mandates a General Sales Tax (GST) of at least 18% on all goods, including building supplies, and a 25% GST on luxury imports. The bill, which was introduced in the Senate, is anticipated to cover the shortfall in tax revenue. The tax authorities need to reach the PKR 7.4 trillion target for the current fiscal year (22022-23).
Following is a breakdown of the proposed new tax measures:
PKR 10 billion is to be raised by increasing excise duty on business, first and club-class air tickets with a tax rate of 20% or PKR 50,000 (whichever is higher).
PKR 6 billion is to be raised by raising excise duty on cement from PKR 1.5 to PKR 2 per kilogram
PKR 10 billion is to be raised by increasing excise duty on carbonated/aerated drinks from 13% to 20%
PKR 115 billion to be generated from raising federal excise duty on cigarettes and increasing the general sales tax rate from 17% to 18%
PKR 4 billion is to be raised by imposing a new excise tax of 10% on non-aerated drinks like juices
PKR 4 billion is to be raised by increasing the sales tax rate to 18% from 17% on completely-built mobile phone imports costing between USD 200 to USD 500, and a sales tax rate of 25% on sets worth USD 500 or above
PKR 4 billion is to be raised by increasing the sales tax rate to 25% on luxury items in the category of food import, including confectionery, jams and jelly, fish and frozen fish, sauces, ketchup, fruits and dry fruits, preserved fruits, cornflakes, frozen meat, juices, pasta, aerated water, ice cream, and chocolates
PKR 1-2 billion to be raised from a 10% withholding tax on functions and gatherings in commercial places
As much as 25% tax will be levied on luxury items; such as home appliances, cosmetics, crockery, pet food, private weapons and ammunition, shoes, chandeliers and lighting (except energy savers), headphones and loudspeakers, doors and window frames, travelling bags and suitcases, sanitary ware, carpets (except imported from Afghanistan), tissue paper, furniture, shampoos, automobiles, luxury mattresses and sleeping bags, bathroom ware, toiletries, heaters, blowers, sunglasses, kitchenware, cigarettes, shaving goods, luxury leather apparel, musical instruments, saloon items like hair dryers, etc.
it is important to note that, Pakistan signed an agreement with IMF for the USD over 6 billion in assistance under its Extended Fund Facility (EFF). However, the IMF refused to conduct the 9th review for the release of a USD 1.2 billion tranch to stabilise external payment pressure.
Nauman Ahmad is an imaginative Pisces whose love for literature and nature is unparalleled. When he's not reading or hiking, he's sleeping and eating, which gives him plenty of energy for his next adventure.
