In order to comply with IMF conditions, Pakistan government will present a supplementary finance bill or mini budget before the parliament (today) on February 15, 2023 for the approval.
According to sources in the finance ministry, prior to presenting the supplementary finance bill the government was intended to promulgate through a presidential order.
Earlier, Dr. Arif Alvi, the president of Pakistan, refused to sign the bill at a meeting with Finance Minister and advised the government should approve the bill from the parliament.
READ MORE: Pakistani taxpayers to pay tax through debit and credit cards
Federal Minister Muhammad Ishaq Dar, called on President Dr Arif Alvi on February 14, 2023 and apprised him about the progress in talks with the International Monetary Fund (IMF) and that all modalities have been agreed upon.
According to an official press statement, the President appreciated the efforts of the government for negotiating an agreement with the IMF, and assured that the state of Pakistan would stand by the commitments made by the Government with the IMF.
READ MORE: FBR announces key transfers, postings in Pakistan Customs Service
The Minister informed that the government wanted to raise additional revenue through taxes by promulgating an ordinance. “The President advised that it would be more appropriate to take the Parliament into confidence on this important subject, and that a session be called immediately so that the bill is enacted without delay.”
According to a statement issued from the president house, the president called separate sessions of the national assembly and senate on February 15, 2023.
The National Assembly Session has been called at 3:30 PM and the session of Senate has been called at 4:30 PM for the mini budget approval.
The government is taking harsh taxation measures on the demand of the IMF to general more revenue for lower the fiscal deficit.
READ MORE: Pakistan set to announce mini budget; sales tax rate may rise to 18pc
The sources highlighted the major changes in the tax laws including imposition of 0.6 per cent withholding tax on non-filers for making banking transactions.
Meanwhile, it is part of proposal to tax the foreign exchange income of the banks.
The most important change is enhancing sales tax at 17 per cent to 18 per cent. Furthermore, enhancing fixed federal excise duty on motor vehicles was also under consideration.
The sources said that the enhancing excise duty on soft drinks was also under consideration besides the duty enhancement on cigarettes was also likely.
They said that imposition of a flood levy is also on the cards. This levy may be imposed on imports at 3 to 10 per cent. However, exports would be exempted from the flood levy.
In the latest development, Federal Board of Revenue (FBR) on Tuesday announced massive increase in federal excise duty on sales of cigarettes. The FBR issued SRO 178(I)/2023 to notify the new rates of federal excise duty (FED) on sales of cigarettes.
READ MORE: Pakistan announces massive increase in excise duty on cigarettes
Following are the new FED on sales of cigarettes with effect from February 14, 2023:
01. The rate of duty shall be Rs16,500 per thousand cigarettes on locally produced cigarettes if their on-pack printed retail price exceeds nine thousand rupees per thousand cigarettes.
02. Rate of duty shall be Rs5,050 per thousand cigarettes on locally produced cigarettes if their on-pack printed retail price does not exceed nine thousand rupees per thousand cigarettes.
