Image default

Govt imposes Rs170 billion new taxes to meet IMF conditions

ISLAMABAD (Eshfak Mughal):- The Federal government has surrendered before the International Monetary Fund (IMF) by imposing Rs170 billion new taxes on almost every already taxable item in the mini budget.

According to Finance supplementary bill 2023, government has not only increased rate of sales tax from 17 to 18 percent on all sales taxed items including mobile phones, locally produced Coal, Potassium Chlorate (explosives, fireworks, safety matches, and disinfectants) but also increased FED on cigarettes, aerated as well as sugary drinks, Air tickets and advance income tax on the bills of wedding gatherings to obtain the next trache from IMF.

As per the details, the government has made an amendment in the section 3 of sales tax act 1990 by substituting the word “seventeen” with “eighteen”.

According to one official, the government has increased sales tax from 17 to 18 percent on every item except food and health and this will bring a new wave of inflation which has already crossed 30 percent.

The government has estimated to collect Rs55 billion by enhancing the sales tax rate to 18% in the remaining period of the current fiscal year.

In addition, government has introduced new proviso in the sales tax act with regard to collection of goods specified in the third schedule such as Fruit juices and vegetable juices, Ice Cream, Aerated waters or beverages, Syrups and squashes, Cigarettes, Toilet soap, Shampoo, Toothpaste, Shaving crea Perfumery and cosmetics, Tea, Powder drinks, Milky drinks Toilet, Shoe polish and shoe cream, Cement sold in retail packing and a dozens items.

According to bill, the FBR will issue notification in the official gazette.

According to the Finance supplementary bill, the government has increased sales tax from 17 to 18 percent on locally produced Coal which means the consumers shall have to pay more bills in coming months.

Energy minister Khurram Dastagir told the media yesterday that Pakistan plans to increase domestic coal-fired power capacity to 10 gigawatts (GW) in the medium-term, from 2.31 GW currently.

Apart from this one, the government has already increased electricity prices under the circular debt management plan to curtail mounting circular debt worth of Rs952 billion.

In addition, the government has also increased tax from 17 to 18 percent Potassium Chlorate such as explosives, fireworks, safety matches, and disinfectants.

Taxes on Mobile Phones

According to the Finance supplementary bill, the government has also increased sales tax from 17 to 18 as well as 25 percent on different categories of mobile phones.

The FBR will charge 18% sales tax on CBUs mobile phones exceeding US$ 200 but not exceeding US$ 350.

Similarly, the FBR will also charge 18% sales tax on CBUs mobile phones ranging from US$ 350 to US$ 500.

The sales tax rate on mobile phones exceeding US$ 500 shall also charge 25% from 17%.

10percent tax on Private limited company share

The government has also inserted a new section by amending income tax ordinance with regard to acquiring a capital asset.

Explaining the new insertion, one official said that the government has imposed 10percent tax on the sale of Private Limited Company’ further shares into third person other than the public listed companies.

Advance tax on Functions and gathering

According to Finance Supplementary bill 2023, the government has also imposed 10percent advance tax on the total amount of the bill from a person arranging or holding a function in a marriage hall, marquee, hotel, restaurant, commercial lawn and club.

Explaining this sectio, officials said that the government has restored the advance tax on functions and gatherings besides widening the definition of functions.

Functions include any wedding related event, a seminar, workshop, a session, an exhibition, a concert, a show, a party or any other gathering held for such purpose.

FED on cigarette, aerated and sugary drinks

According to the Finance Supplementary bill 2023, the government has increased more than 150 percent FED on per stick cigarette from Rs6.5 per cigarette to Rs16.5.

Similarly, FBR has also approximately 100percent increased FED on per stick from Rs2.55 to Rs5.05 for less expensive brands.

On the other hand, officials explained that the government has increased FED from thirteen to twenty percent on aerated drinks such as Coca Cola, Pepsi and others.

Meanwhile, the government has also imposed 10percent FED on the retail price of Sugary fruit Juices.

Furthermore, the government has also increased Rs50,000 FED per ticket on international flights issued on or after the date of commencement of the Finance (supplementary) bill 2023.

Related posts

SECP Strikes Down Illegal Personal Loan Applications


No plan to use of foreign reserves of commercial banks, Dar


Why climate action is critical to reducing poverty, study


Leave a Comment