The government of Pakistan plans to increase the sales tax on a variety of cosmetics and other non-essential items to 25%. While the government desperately tries to save its arrangement with the International Monetary Fund (IMF), a summary has been moved for applying higher general sales levy to generate an additional Rs. 11 billion in revenue.
The debated new tax needs to be approved by the federal cabinet after weekly inflation soared to 41% year over year.
Imposition of Tax on Luxury Items
Jewellery, planes and ships, sports equipment, bottled water and juice, automobile “completely built units” (CBU), tiles for kitchens and bathrooms, carpeting, candies, cigarettes, cosmetics, facial tissues, cutlery, frames for windows, fish, shoes, fruits, and dry goods are just some of the products available.
Duties will be quite high on locally made cars with engine displacements of 1,800 cc and up. After the federal cabinet gives its final approval, an official announcement will be made.
With the ninth installment of loans from the International Monetary Fund (IMF) pending, the government last month passed Supplemental Finance Bill 2023 to satisfy IMF requirements.
To read our blog on “Heavy taxes on cigarettes will facilitate illicit producers,” click here.