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In midnight offensive, govt raises GST to 18%

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The government on Tuesday increased the general sales tax (GST) rate to 18% and drastically enhanced cigarette taxes with immediate effect to collect Rs115 billion out of the planned Rs170 billion mini-budget.
The federal cabinet took the step to implement another condition set by the International Monetary Fund (IMF) for the revival of the derailed $6.5 billion programme after President Arif Alvi refused to promulgate an ordinance sent by the government.
But the global lender will accept only permanent tax measures, which the government will ensure by getting the parliament’s nod.
While exercising its administrative authority, the federal cabinet increased the GST rate by 1% to 18% and also enhanced the federal excise duty (FED) rates on cigarettes to give effect to Rs115 billion new taxes from midnight, Finance Minister Ishaq Dar told The Express Tribune after the cabinet meeting.
It is the first time the government has made a real dent in the tobacco sector by massively increasing cigarette taxes.

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