ISLAMABAD: Prime Minister Shehbaz Sharif has rejected two major budgetary proposals of the Federal Board of Revenue (FBR) to raise standard rate of sales tax from 18 to 19 percent and impose 18 percent sales tax on petroleum products or “Carbon Tax” on POL products.
Sources told Business Recorder that the FBR has proposed one percent increase in sales tax rate from 18 to 19 percent to generate and additional revenue of Rs40-50 billion in 2024-25. The Prime Minister has rejected the proposal due to its immediate inflationary impact on the general public.
The Prime Minister has issued directions to the FBR to improve enforcement and administrative measures and draft alternate proposals on untaxed or under-taxed sectors of the economy.
Many zero-rated items: FBR proposes standard rate of 18pc sales tax
The Prime Minister has also directed the FBR to bring a proposal to increase tax on non-essential and luxury items, sources said.
The second proposal to impose 18 percent sales tax on POL products has also been turned down by the Prime Minister as it is also inflationary having immediate impact on the general public.
Out of total proposed measures of Rs1,200 billion to Rs1,300 billion by the FBR, the government is expected to approve nearly Rs400-500 billion measures, sources added.
Copyright Business Recorder, 2024
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