The Pakistan Tehreek-e-Insaf (PTI) government plans to table the mini-budget in the Parliament today (Thursday).
According to media reports, the mini-budget has earned the cabinet’s nod and will roll back tax exemptions worth Rs350 billion.
The Finance Supplementary Bill 2021 is a part of the conditions set by the International Monetary Fund (IMF) to revive Pakistan’s stalled bailout programme.
Finance Minister Shaukat Tarin is set to table the bill to amend tax laws known as the mini-budget on Thursday (today) at 4 pm.
The details of the mini-budget aren’t public yet. Still, critics say that it could increase malnutrition in the country because of the spike in the cost of goods critical for nourishment.
The finance ministry said that about 144 goods, currently exempted from General Sales Tax (GST), would now be taxed at 17%.
Another Rs7 billion will be collected by surging the income tax rate on mobile phone calls by 15%.
Moreover, the GST rate on cars above 850cc would go up to 17%, and the tax on the import of electric vehicles in CBU conditions will go up from 5% to 17%. It is pertinent to state that raw materials for preparing milk for infants would be taxed at 17% to amass Rs9 billion revenues annually.
The government has also proposed a 17% GST on raw materials for pharmaceutical products to earn revenue worth Rs45 billion. This includes Rs15 billion at the local stage and Rs30 billion at the import stage. However, the FBR said it would refund the amount and raw material would be zero-rated.
As per the proposed amendments, bread prepared in restaurants, bakeries, food chains, and shops would be taxed at a 17% rate to accumulate Rs5 billion every year. However, nan, chapati and sheermal made at tandoors will remain exempted. Cooked food in messes will be taxed at a 17% rate – contrary to PM Imran’s vision of ending hunger