ISLAMABAD: The Finance (Supplementary) Act, 2023 has empowered the Federal Board of Revenue (FBR) to impose a higher rate of 25 percent sales tax on the import of luxury items.
According to the Finance Act, 2023, issued by the government on Thursday, the federal government may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, declare that the tax on goods specified in the Third Schedule shall be collected and paid at such higher rate or rates on the retail price thereof, as may be specified in the said notification.
Earlier, the FBR has no powers of the federal government to impose 25 percent sales tax through a statutory regulatory order (SRO). Finance (Supplementary) Act 2023 has given such powers to the FBR to impose higher rates of sales tax.
Under the Finance (Supplementary) Act 2023, the person acquiring a capital asset, being shares of a company, shall deduct advance adjustable tax from the gross amount paid as consideration for the shares at the rate of 10 percent of the fair market value of the shares which shall be paid to the commissioner by way of credit to the federal government, within 15 days of the payment.
As per Act, 10 percent FED would be applicable on sugary fruit juices, syrups and squashes, and waters whether or not containing added sugar or artificial sweeteners excluding mineral and aerated waters.
Copyright Business Recorder, 2023