The government might opt for 5% sales tax on petroleum products, along with an increase in the standard rate of the general sales tax (GST) by 1% and withdrawal of unnecessary tax exemptions during the next fiscal year in order to generate an additional revenue of Rs2,000 billion, sources said on Sunday.
According to Federal Board of Revenue (FBR) sources, 5% sales tax on petroleum products had been proposed in the initial stage during fiscal year 2024-25. They added that the authorities expected to generate Rs600 billion under this head.
Continuing, the sources said, another proposal for the next year’s finance bill pertained to the abolition of all unnecessary sales tax exemptions. By ending such exemptions, Rs500 billion could be saved, they added.
Besides, various other proposals were also being considered to generate Rs700 billion more. According to the sources, this additional tax target could be achieved if the sales tax rate was increased by 1% -- from the current 18% to 19%. However, some circles apprehend that this measure could increase inflation.
Another proposal to boost revenues included a 1% increase in import duties. According to the sources, an additional income of Rs50 billion had been estimated by increasing the rate of commercial importers’ duties.
The sources revealed that all the tax proposals for the upcoming budget had been shared with the International Monetary Fund (IMF). There was a possibility of changes in these suggestions after consultation with the IMF, they added.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ