Islamabad: The current government has announced a “mini-budget” aimed at generating Rs170 billion in revenue by implementing new taxes, which are in line with the International Monetary Fund’s (IMF) requirements to generate revenue. The Federal Board of Revenue (FBR) has released an SRO, which will increase the general sales tax (GST) rate from 17% to 18%, to collect Rs115 billion in taxes, while the remaining Rs55 billion will be generated through other measures outlined in the Finance (Supplementary) Bill 2023.
According to the notification, the new 18% GST rate will apply to everyday items such as consumer packaged goods. The tax hike will cause a rise in the prices of essential items such as edible oil, biscuits, jam, jelly, noodles, children’s toys, chocolates, coffee, makeup, shampoos, creams, lotion, soap, toothpaste, hair colour, hair remover cream, hair gel, shaving foam, shaving gel, shaving cream, shaving blades, computers, laptops, electronic gadgets, smartphones, iPods, TVs, LEDs, LCDs, juicers, blenders, other electronic machinery, car shampoos, car polishes, perfumes, and branded perfumes.
In addition to these measures, the government plans to increase the GST on luxury items from 17% to 25%. The Federal Excise Duty (FED) on business and first-class air tickets will be raised to Rs20,000 or 50%, whichever is higher. To collect more revenue, ten percent withholding adjustable advance income tax will also be imposed on marriage halls, and the FED on soft and sugary drinks and cement will be raised.
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