New taxation steps come into effect today

ISLAMABAD: The government has enforced new taxation measures of Rs1.761 trillion, taken through Finance Act 2024, from July 1, 2024, including increased tax burden on salaried class and heavy indirect taxation on general public including imposition of sales tax on stationery items, dairy products and poultry feed.

The Federal Board of Revenue (FBR) has issued Finance Act 2024 incorporating amendments made in the Finance Bill 2024.

The FBR has also rescinded customs and withholding tax related notifications to abolish exemptions/zero-rating and reduced rates from July 1, 2024.

Additional taxation steps taken thru amendments to Finance Bill

In this regard, the FBR has issued nine SROs here on Sunday. From July 1, the customs duty related changes at the import stage have also been implemented at ports.

Finance Act 2024 has enforced income tax measures of Rs 443 billion and personal income tax (PIT) increase of Rs 224 billion; sales tax measures of Rs 485 billion; Federal excise duty measures of Rs 289 billion and the Act has implemented customs duty measures of Rs 70 billion.

From July 1, the government has withdrawn various exemptions/zero rating and reduced/fixed rates.

From the start of the new fiscal year (2024-25), the FBR will charge sales tax on items on which exemption or zero-rating has been withdrawn.

Besides, raise in the excise duty on international air travel, the federal excise duty (FED) of Rs15 per kg would be applicable on supply of white crystalline sugar by any person to a manufacturing, processing or packaging entity.

The government has also increased the Federal Excise Duty (FED) on cement from Rs 3 per kg to Rs 4 per kg through an amendment in Finance Bill. In budget (2024-25), the rate of FED on cement was enhanced from Rs. 2 per kg to Rs. 3 per kg.

The government has imposed 10 percent sales tax on poultry feed; 10 percent tractors, 10 percent on oil residue and 10 percent sales tax on edible vegetables from Afghanistan.

The government has raised taxes on salaried, non- salaried class, real estate, retailers, and vehicles, removed GST exemptions, and slapped taxes on milk and milk products, mobile phones, tier-1 retailers of branded stores at 18 percent.

Copyright Business Recorder, 2024