Government will raise PKR 170 billion to resume IMF accord

Government will raise PKR 170 billion to resume IMF accord

Islamabad: According to news reports, Finance Minister Ishaq Dar introduced the Finance (Supplementary) Bill, 2023 on Wednesday, February 15, to raise PKR 170 billion in taxes to restart the International Monetary Fund (IMF) agreement.

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The new finance bill stipulates that general sales tax (GST), which includes building supplies, must be at least 18% and luxury imports must be subject to a 25% GST. It is hoped that the bill, which was submitted in the Senate, will make up for the lost tax revenue. For the current fiscal year, the tax authorities must attain the objective of PKR 7.4 trillion (22022-23).

The new tax proposals are broken out as follows:

Increasing the excise duty on business, first, and club class airline tickets to a tax rate of 20% or PKR 50,000 will collect PKR 10 billion (whichever is higher).
By increasing the excise charge on cement from PKR 1.5 to PKR 2 per kilogramme, PKR 6 billion will be raised.
By raising the excise tax on carbonated/aerated drinks from 13% to 20%, PKR 10 billion will be raised.
Increasing the federal excise tax on cigarettes and hiking the general sales tax from 17% to 18% will bring in PKR 115 billion.

A new excise duty of 10% will be applied to juices and other non-aerated beverages in order to raise PKR 4 billion.
By raising the sales tax rate from 17% to 18% on imported fully-built mobile phones that cost between USD 200 and USD 500 and from 17% to 25% on sets costing USD 500 or more, PKR 4 billion will be raised.
The sales tax rate on upscale imports of food, such as confectionery, jams and jellies, fish and frozen fish, sauces, ketchup, fruits and dry fruits, preserved fruits, cornflakes, frozen meat, juices, pasta, aerated water, ice cream, and chocolates, will be raised to 25% in order to raise PKR 4 billion.
A 10% withholding tax on events and gatherings held in commercial spaces is expected to bring in between PKR 1 and 2 billion.
Read: SBP permits a single exception to import prohibitions.

Luxury goods like home appliances, cosmetics, crockery, pet food, private weapons and ammunition, shoes, chandeliers and lighting (except energy savers), headphones and loudspeakers, doors and window frames, travel bags and suitcases, sanitary ware, carpets (except those imported from Afghanistan), tissue paper, furniture, shampoos, cars, luxury mattresses and sleeping bags, bathroom ware, toiletries, heaters, blowers, sunglades, and sunglass frames will all be subject to up to a
It is crucial to remember that Pakistan and the IMF inked a contract for USD over 6 billion in assistance under the latter’s Extended Fund Facility (EFF). Although the release of a USD 1.2 billion tranche to stabilise external payment pressure was requested, the IMF refused to complete the ninth review.

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