caught between rock and hard place, govt imposes rs170b additional taxes

g New taxes iN liNe with reveNue collectioN target set by iMF to reiNstate prograMMe president arif alvi. according to the bill tabled in both, the upper and the lower house, the government has further increased rate of sales tax from 17 to 18 percent on other sales taxed items, including mobile phones, locally produced coal, potassium chlorate (explosives, fireworks, safety matches, and disinfectants), aerated as well as sugary drinks, air tickets. it has also imposed an advance income tax on the bills of weddings and gatherings, and a percentage of tax on the sale of the shares of a private limited company in the secondary market.

Cigarette prices to go up by over 250pc

Unleashing ‘mini-budget’, govt drops petrol, gas bombs on inflation-hit masses

ISLAMABAD ahmad ahmadani

ISLAMABAD shahzad paracha aFtera deadlock in negotiations for over 5 months and a week worth of negotiations, the Federal government has surrendered before the international Monetary Fund (iMF) by imposing rs 170 billion in new taxes, on almost every already taxable item in the mini budget. the day started with the issuance of sro 179 (i), by the revenue division of the finance ministry, announcing an increase of 1% in the sales tax receivable on all the taxable items under subsection 1, section 3 of the sales tax act, 1990. this includes a range of taxable items including imported goods. according to one official, this includes almost every item except food and health and this will bring a new wave of inflation which has already neared 30 percent. prior to that an increase in the FeD on cigarettes was also announced that is estimated to cause a 150% nominal raise in the FeDs on cigarette sales since last year. the government has increased more than 150 percent FeD on per stick cigarette from rs6.5 per cigarette to rs16.5. similarly, Fbr has also approximately increased FeD by 100%, per stick from rs2.55 to rs5.05 for less expensive brands. a revenue of rs. 115 billion is expected to be generated from the aforementioned steps. however, the government aims to increase its revenue by more than 170 billion, in accordance with the conditions that have been set by the iMF mission. therefore, for the remaining rs. 55 billion, the Finance (supplementary) bill 2023, was tabled in front of the parliament by the finance minister ishaq Dar. the decision to present the bill in front of the parliament was taken on the “advice” of the in his speech at the National assembly, the Finance Minister ishaq Dar claimed that the new taxes were meant for high ticket items only however a strong case, contrary to that claim can be made. in the bill, government has introduced new provisions in the sales tax act, 1990 with regard to collection of goods specified in the third schedule such as Fruit juices and vegetable juices, ice cream, aerated waters or beverages, syrups and squashes, cigarettes, toilet soap, shampoo, toothpaste, shaving cream perfumery and cosmetics, tea, powder drinks, Milky drinks toilet, shoe polish and shoe cream, cement sold in retail packing and a dozen items. according to the bill, the Fbr will issue a notification in the official gazette.

The Finance (Supplementary) Bill, 2023: it is important to note that the political stakeholders were made party to the increase in only a handful of taxes, proportionally 32% of them through the aforementioned bill. the rest were enacted after the Federal cabinet’s approval, through sros.

CONTINUED ON PAGE 03 hours after unleashing a tax-loaded ‘mini-budget’, the federal government late wednesday night jacked up the prices of petrol and gas to a historic high in a bid to appease the international Monetary Fund (iMF) for unlocking the critical loan tranche. after finding an advice from the petroleum Division, the oil and gas regulatory authority (ogra) notified a gas sale price hike from 16 to 113 pc for categories of gas consumers of sui Northern gas pipelines limited and sui southern gas company limited. according to ogra, the Ministry of energy (petroleum Division) on wednesday (15th February 2023) communicated the decision of the economic coordination committee, ratified by the Federal cabinet, in respect of gas sale price, effective January 01, 2023. and, ogra, after receipt of the said advice, has notified the sale prices against each category of retail consumers of natural gas. the said notification is available at ogra’s official website. as per details, domestic category of gas consumers who use 100 cubic meters of gas will face 16.6% hike in the gas price as the new price of gas for such gas consumers has been fixed at rs 350 per Million british thermal unit while previously they were paying rs 300/MMbtu for using 100 cubic meters of gas in a month. similarly, gas price for the domestic gas consumers who use 200 cubic meters of gas has been jacked up by 32% and the new gas price for those domestic consumers has been set at rs 730/MMbtu while previously they were paying rs 553/MMbtu for using 200 cubic meters of gas. likewise, gas price for domestic gas consumers who use 300 cubic meters of gas has been increased by 69pc as the new gas price for those gas consumers has been fixed at rs 1250/MMbtu while previously they were paying rs 738/MMbtu for using 300 cubic meters of gas. For gas consumers who use 400 cubic meters of gas, the gas price increase is 99pc as the gas price for those consumers has been fixed at rs 2200/MMbtu while previously they were paying rs 1107/MMbtu for using 400 cubic meters of gas. Furthermore, gas consumers who use more than 400 cubic meters of gas, the gas price hike is 124pc as the gas price for such consumers has been set at rs 3277/MMbtu while previously they were paying rs 1460/MMbtu for using 400 cubic meters of gas.

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