Ishaq Dar, the federal minister of finance and revenue, introduced the Finance Bill on Wednesday in the National Assembly, announcing an increase in the Government Sales Tax (GST) on luxury items including cigarettes in order to comply with IMF requirements. The tax increase ranges from 17 to 25 percent.
Ishaq Dar proposed a number of changes to the Finance Supplementary Bill 2023, including raising the GST on other items by 1% to a fixed rate of 18% and raising the sales tax on luxury items from 17% to 25%.
The tax for first-class and business-class passengers increased to Rs 50,000 or 20% after an advance tax on air travel was enacted. This choice was made to encourage domestic travel.
The finance minister in his address to add an advance income tax to marriage halls, commercial lawns, marques, and clubs by 10 % to bring more business under the tax net and increase the revenue of the government.
Moreover, the increase in federal excise duty on cement is fixed from Rs1.5/kg to Rs2/kg.
In addition to these changes, the minister announced to impose of federal excise duty on Trier 1 and Trier 2 cigarettes at Rs 16,500 and Rs 5,050 per thousand cigarettes respectively, meanwhile, a 10% tax is also imposed on the retail price of fizzy drinks.
Additionally, the sales tax on cell phones costing USD $500 has been increased to 25% from 17%. This move is aimed to promote local manufacturing.
