Items including decorative goods, high-end mobiles, imported food to several other items are set to become expensive in Pakistan after the government raised sales tax from 17% to 25% on 33 categories of goods.
The measures are in line with its attempt to unlock the $ 1.1 billion tranche of funding from the International Monetary Fund (IMF), which has refused to release the tranche under the $7 billion loan facility unless crucial decisions are made by the government and implemented.
The Federal Board of Revenue (FBR) on Wednesday issued a Statutory Regulatory Order (SRO) for a 25 per cent imposition of General Sales Tax, the local newspaper reported.
The notice was issued to implement the last part of the Rs170 billion tax revenue measures with effect from Wednesday, reported by the news agency.
Luxury items that will come under 25% sales
The luxury items that will come under 25% sales tax in the category of food import include confectionery, jams and jelly, fish and frozen fish, sauces, ketchup, fruits and dry fruits, preserved fruits, cornflakes, frozen meat, juices, pasta, aerated water, ice cream, and chocolates, according to the report.
List of items to become costlier
1) Aerated water and juices
2) Confectionary items
3) Vehicles in CBU condition
4) Sanitary and bathroom wares
5) Carpets (excluding those from Afghanistan)
6) Chandeliers and lighting devices
7) Chocolates
8) Cigarettes and cigars
9) Ready-to-use cereals
10) Cosmetics and shaving items
11) Tissue papers
12) Kitchenware and household items
13) Decorations or ornamental articles, articles of jewelry, wristwatches
14) Dog and cat food
15) Doors and window frames
16) Fishes
17) Footwear
18) Fruits and dry fruits
19) Furniture
20) Home Appliances
21) Ice cream, jam, jellies
22) Leather jackets
23) Mattress and sleeping bags
24) Fresh, chilled, frozen meat
25) Musical instruments
26) Pasta, tomato catchup, sauces
27) Arms and ammunition excluding defense stores
28) Shampoos
29) Sunglasses, traveling bags, and suitcases
30) A ship, or aircraft for private use
It has also imposed 25 per cent sales tax on import of mobile phones valuing above $500 per piece, according to local blog website report.
Apart from these commodities, 25 per cent GST has also been imposed on three categories of locally manufactured goods which include locally manufactured or assembled SUVs and CUVs, locally manufactured or assembled vehicles having engine capacity of 1,400cc and above, and locally manufactured or assembled double cabin (4×4) pick-up vehicles.
The FBR expects that the measure will help to fetch Rs. 7 billion on imported luxury goods and Rs 4 billion on locally manufactured vehicles in Pakistan.
Finance Minister Ishaq Dar last month through the Finance (Supplementary) Bill 2023 introduced tax measures to raise an additional Rs. 170 billion in the next four and a half months to meet the last prior actions decided upon with the IMF to secure early disbursement of the installment.
To read our blog on “Rs. 170 bn mini budget passed by NA in IMF context,” click here.
