Edited By: Shankhyaneel Sarkar
Last Updated: February 15, 2023, 19:07 IST
Pakistan finance minister Ishaq Dar presented a mini budget to unlock the suspended IMF bailout package and stop his country from defaulting on its debt (Image: Reuters File)
The finance bill, which is being dubbed as a mini-budget, was drawn after Pakistani officials met IMF earlier and agreed to a target of raising PKR 170 billion in new taxes
Pakistan finance minister Ishaq Dar introduced the Finance (Supplementary) Bill 2023 in the nation’s National Assembly on Wednesday. Dar announced last week that the government would introduce a mini-budget to generate PKR 170 billion in additional revenues in four months in order to secure the IMF bailout package.
A National Assembly session is under way and they have to pass the mini-bill to fulfil the requirements set by the IMF and revive the stalled loan programme to avert Pakistan from defaulting on its debt.
In the finance bill, the rate of Goods and Services Tax (GST) has been increased from 17% to 18%, according to CNN-News18.
The government has proposed to raise taxes on luxury items to 25%. The finance minister’s mini budget also proposes raising federal excise duty on cigarettes and sugary beverages. An 18% sales tax will be levied on perfumes and branded perfumes.
The government has proposed increasing sales tax on laptops, LED TVs, LCD TVs, smartphones, iPads and other electronic items, including juicers, blenders and other electronic machinery to 18%.
It has also proposed increasing sales tax on car shampoo, car polishing cream and other related products to 18%, according to CNN-News18.
The mini budget proposes increasing the federal excise rate on cement from PKR 1.5 per kg to PKR 2 per kg.
Advance income tax levied on wedding halls’ bills has been raised to 10%. The government has also proposed increasing federal excise tax on business and first-class air tickets.
The government has also tried to address the concerns of the poor by giving farmers fertilisers worth PKR 30 billion. Discounts will be offered on tractors and farmers will be given 75,000 solar tube wells, according to CNN-News18.
The government has also proposed to allocate more funds to the Benazir Income Support Programme (BISP) and beneficiaries will receive a higher stipend as the government plans to allocate PKR 400 billion to the programme.
The bill was tabled after Pakistan President Arif Alvi urged Dar earlier this week to take the assembly into confidence.
The Shehbaz Sharif-led coalition government was keen on expediting the passage of fiscal measures demanded by the International Monetary Fund (IMF), but were forced to head to the parliament due to Alvi’s snub. The bill will be reviewed by both houses.
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