ISLAMABAD: Racing against time to satisfy the International Monetary Fund (IMF) for the revival of the bailout programme, the Shahbaz Sharif government on Tuesday issued the Federal Board of Revenue (FBR). New taxation measures worth Rs 115 billion have been introduced through the notification.
After President Dr. Arif Alvi refused to issue an ordinance to unveil the mini budget, the government moved quickly and the money bill was approved by the federal cabinet.
After this announcement, a cabinet meeting was held under the chairmanship of Prime Minister Shehbaz Sharif, in which it was decided to tax 115 to 116 billion rupees through the FBR’s SRO, while the remaining tax measures of 55 billion rupees were introduced through the Money Bill. will go. Parliament
Following Cabinet approval in the form of the Tax Laws Amendment Bill 2023, the FBR increased the general sales tax GST rate from the standard 17 to 18 percent and increased the Federal Excise Duty (FED) on cigarettes. issued a Statutory Regulatory Order (SRO) for Ordered to get additional Rs 115 billion out of Rs 170 billion sanctioned by the government as per IMF conditions.
However, sources revealed that the government has also approved GST at the rate of 25 per cent on hundreds of high-end luxury items but it will be introduced through the Tax Amendment Bill 2023, which will be tabled in Parliament on Wednesday (today). will be served. .
The FBR has increased the GST rate on all imported luxury items which were banned by the Commerce Ministry some time ago to make imports more expensive. An increased rate of GST has also been proposed on some locally manufactured luxury goods.
The government abandoned the implementation of the flood levy due to stiff resistance from Washington-based lenders.
Alavi refused to issue the ordinance.
Despite the Federal Cabinet’s consent to take this route to immediately levy Rs 115 billion from February 15, 2023, the IMF’s staff-level agreement may be delayed, as the government convened a meeting of the National Assembly today. has taken. 3.30pm and 4.30pm in the Senate to introduce the Tax Amendment Bill 2023.
Finance Minister Ishaq Dar was scheduled to announce the highlights of the mini-budget through a televised speech at 9:25 pm, but his scheduled press conference was canceled at the last hour after changing course.
Dar told reporters outside the finance ministry after attending the federal cabinet meeting that he had requested the president to issue the ordinance but he refused.
He suggested to the government to bring a bill for taxation.
Dar informed the President that taxation issues were involved and the government could not wait for 8 to 10 days more as certain measures would have financial implications, but the President refused to consider the request.
He said the government took another route and directed the FBR to issue an SRO to raise the GST rate to 18%, while the FED on cigarettes would be jacked up.
The finance minister refused to divulge the exact rate and advised patience till the official notification is issued in this regard.
The FED on beverages, sugary drinks and juices will be increased from 13 to 20 per cent and will be made part of the Tax Amendment Bill 2023, which will be tabled in Parliament today.
The minister hoped that the staff-level agreement would be signed within this week.
