Mini Budget presented

Mini Budget presented

Ishaq Dar presented a mini-budget in both houses of parliament to counter the economic crises keeping in mind Rs 170 billion tax agreement with International Monetary Fund (IMF). The finance bill also known as the mini-budget will increase General Sales Tax (GST) from 17pc to 25pc on 33 different categories of goods.

Finance Minister ordered an immediate hike on two measures, raising federal Excise duty on Cigarettes and increasing GST from 17 pc to 18pc. The Federal Board of Revenue is expected to get Rs 115 billion from implementing these two measures.

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Increase in Tax rates

High-end mobile phones, imported food, luxury goods, and Decoration item’s prices will be raised through another notification. Excise duty on cement also increased from Rs 1.5 to Rs 2 per Kg, this measure will fetch another Rs 6 billion.

Rs 10 billion will be increased for the government from a hike in carbonated drinks price from 20pc to 13pc. Non-carbonated drinks like mango, oranges and apple juices are raised to an additional tax of Rs 4 billion.

The government also presented 10pc tax hike on gatherings and events held in marriage halls, marquees and hotels, commercial lawns, clubs, and community places are also included in this withholding tax increase. The sales tax rate on imported mobiles has been raised to 18pc from 17pc. This increase caused a $500 hike from $200 and worth above in importing mobile phones from any country.

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The luxury items that will face 25pc hike include food imports like jams and jelly, frozen fish, ketchup, sauces, dry fruits, pasta, cornflakes, aerated water, ice cream and chocolates. Other items include cosmetics, crockery shoes, lighting, loudspeakers, furniture, shampoos, carpets and other house items.

Along with this increase in tax rates, there is also an increase in electricity and gas rates to fulfill the agreement with International Monetary Fund (IMF). The IMF has given the deadline of 1 March to implement all these measures in the country.

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