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ISLAMABAD: The Federal Board of Revenue (FBR) has finalised proposals for new taxation measures of nearly Rs 300 billion including a one percent increase in the standard rate of sales tax from 17 percent to 18 percent and changes in the withholding tax regime.

Sources told Business Recorder on Thursday that the approval of the Federal Cabinet would be required before the promulgation of the Tax Laws Amendments Ordinance, 2023.

In budget 2022-23, the net impact of the taxation measures stood at Rs355 billion. Through the amended Finance Bill 2022, taxation measures of over Rs600 billion were taken for 2022-23.

Now, it depends upon the government to accept or reject the FBR’s new taxation measures of approximately Rs300 billion under the mini-budget.

FY24 budget: FBR invites proposals on income tax

The FBR recently moved a summary to Finance Minister Ishaq Dar to impose a lower-than-the-standard sales rate of 17 percent on petroleum products which was rejected.

The revenue impact of a 17 percent sales tax on petroleum products has been estimated at Rs90-100 billion in the last five months of the current year.

The FBR has worked out the revenue impact of Rs65 billion during Feb-June (2022-23) by increasing the standard rate of one percent sales tax from 17 to 18 percent.

Another proposal is to increase the rates of withholding taxes to immediately start generating revenue from the remaining period of the current fiscal year.

The proposal to raise the federal excise duty (FED) on sugary drinks would generate Rs60 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 proposed increase in the rates of capital value tax rates on imported and locally-assembled vehicles has been estimated to generate an additional revenue of Rs10 billion.

The proposal to impose a tax on banks’ foreign exchange income has been estimated to generate Rs20 billion.

The proposed increase in the rate of advance tax on the purchase/sale of immoveable property would generate about Rs20-30 billion.

Copyright Business Recorder, 2023

Comments

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zh Feb 10, 2023 06:24am
But the government does not have money for elections.
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KhanRA Feb 10, 2023 09:14am
The only reason poor are being burdened by paying higher sales tax is because the rich won’t pay. Pakistans political parties come from, and serve the interests of, the rich elite. They will not tax themselves. The common man will pay tax, and the country will be in the brink of financial ruin, but the rich will never be forced to pay tax. Not even property tax which is an easy thing to tax.
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ANK Feb 10, 2023 09:23am
What else these imposed Thugs can do. They are here for releiving them from corrupton cases and further looting the country.
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Kashif Feb 10, 2023 10:37am
Why increase in tax? When ever there is financial crisis, people control their spending, why government is not doing it.
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Muhammad Musab Imran Feb 10, 2023 10:38am
The agriculture sector is exempted and only 10% of 224 million people pay their taxes. You cant expect consumers and business to bear additional taxation just because the riches are not included in the taxation umbrella. Tax evasion will further increase !!
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Dr fahad Feb 10, 2023 11:12am
@ANK, Are you mad . Fbr is talking about economics and taxes . Always bring donuts chur comments everywhere
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SAQIB NAWAZ Feb 10, 2023 06:27pm
Taxes on property will destroy industry
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Naushad Chamdia Feb 11, 2023 09:58am
What is Pakistans comparative advantage? Which sector can lift our country and earn more money from the world? 1. Agriculture: opening the sector to new entrants means corporate farming which in turn will bring better yield and you can easily tax them. 2. Human resources development: We have the largest young population. Cut down govt spending from other non-productive areas and open up IT institutes on every street with short courses on basic software, app, and web development. We are three times cheaper than India in the IT world when it comes to IT export.
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Ikram Feb 12, 2023 11:36am
Looks like pakistani poor people has looted this country. Thugs generals will bajwa, dallabaz family and lootadari will not be investigated and will get NROs for the looted money of the country and now this IMF rules to bailout pakistan. Not doubt why skillful Pakistani wont live in this country due to imported thugs.
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