ISLAMABAD: The Federal Board of Revenue (FBR) has estimated to collect Rs650 billion during Feb-June (2022-23) by increasing the standard rate of one percent sales tax from 17 to 18 percent through the promulgation of the Tax Laws Amendments Ordinance, 2023.
Sources told Business Recorder on Tuesday that the Ordinance is expected to be promulgated after February 9, 2023. The new revenue measures would be around Rs300 billion.
After the promulgation of the ordinance, the revenue collection target of the FBR may be increased from Rs7,470 billion to Rs7,650 billion for 2022-23, reflecting an increase of Rs180 billion.
So far the tax collection target of Rs7,470 billion has not been changed. If the proposal of increasing the sales tax rate from 17 percent to 18 percent has been approved, the FBR will get additional revenue of Rs650 billion in the remaining period of 2022-23.
The FBR will also be able to recover super tax from high-income earners after the latest order of the Supreme Court of Pakistan, sources said. The proposal to raise the federal excise duty (FED) on sugary drinks would generate Rs60 billion. The sugary drinks would include energy drinks and juices and not limited to beverages. The proposed impact of further raise in the FED on cigarettes has been estimated at Rs25-30 billion.
The revenue impact of the proposed withholding tax on banking transactions of non-filers is nearly Rs45 billion.
The three percent flood levy could generate additional revenue of Rs60 billion.
The government has dropped the proposal of withdrawal of sales tax exemption on the import of raw materials/ inputs used in the manufacturing of export goods under the “export facilitation scheme”. The export sectors would not be touched in the mini-budget, the sources added.
The government under the contingency revenue measures agreed with the International Monetary Fund (IMF) to increase FED on sugary drinks/ cigarettes and the withdrawal of sales tax exemption to the exporters if a month’s revenue collection data underperformed.
Copyright Business Recorder, 2023