ISLAMABAD: President Arif Alvi Thursday signed the Finance (Supplementary) Bill, 2023, implementing additional taxes and duties of Rs170 billion to meet the understanding reached with the International Monetary Fund for Extended Fund Facility.
Now, Finance (Supplementary) Bill, 2023 has become an Act from February 23, 2023.
The president has signed the Finance (Supplementary) Bill, 2023 under Article 75 of the Constitution.
The IMF had asked the government to raise an additional Rs170 billion in tax revenue. The bulk of tax measures at cost of Rs115billion was already implemented from February 14 through Statutory Regulatory Orders (SROs). Now, after the president’s formal assent, the remaining Rs55billion tax measures will come into effect. The Finance (Supplementary) Act, 2023 has enforced the additional taxation measures across Pakistan including raise in the Federal Excise Duty on business class and club class air tickets and a raise of the FED on beverages and juices. The FED has been enhanced on sugary and aerated drinks, while FED has also been increased on cement.
According to the Act, the general sales tax (GST) has been increased from 17 to 18 per cent. It has been decided to enhance the GST on luxury items from 17 to 25 per cent.
The finance bill or “mini-budget” has been approved under Article 75 of the Constitution of Pakistan.
According to the sources, the Prime Minister Secretariat had sent the bill to the President Secretariat on Wednesday evening for assent, the National Assembly passed the bill lost Monday (21 February).
The president gave approval to the bill in accordance with Article 75 of the Constitution of Pakistan. Under Article 75 (1), the president has no power to reject or object to the finance bill, which is considered to be a money bill as per the Constitution.
According to Article 75 (1), “When a Bill is presented to the President for assent, the President shall, within ten days: - (a)assent to the Bill; or (b)in the case of a Bill other than a Money Bill, return the Bill to the Majlis-e-Shoora (Parliament) with a message requesting that the Bill, or any specified provision thereof, be reconsidered and that any amendment specified in the message be considered.”
Under this Act, sales tax is increased from 17-25 percent on 33 categories of goods covering 860 tariff lines — including high-end mobile phones, imported food, decoration items, and other luxury goods. The People will also have to pay more for business-class air travel, wedding halls, mobile phones, and sunglasses.
The prime minister on Wednesday unveiled a host of austerity measures to save Rs200 billion — aimed to keep the country afloat as the nation buckles up to meet the IMF’s terms.
According to the sources, Pakistan and the IMF will sign the staff-level agreement on February 28, 2023. They said the IMF executive board meeting is expected in the first week of March.
Copyright Business Recorder, 2023