Islamabad: The federal government has started imposing new taxes under the Rs 1 trillion 70 billion mini-budget agreed with the International Monetary Fund (IMF).
The FBR has increased the GST rate from 17 to 18 percent while also increasing the federal excise duty rate on cigarettes to over 150 percent.
A senior FBR officer told Express that not only the notification has been issued but instructions have also been issued to the field formations and the new tax rate has been implemented from today (Wednesday).
SRO No. 178(I) 2023 issued to increase the rate of federal excise duty states that the federal excise duty on cigarettes included in Tier One has been increased from Rs. 6,500 to Rs. 16,500 per 1,000 cigarettes. While the federal excise duty on cigarettes included in tier two has been increased from 2,500 rupees to 5,500 rupees per 1,000 cigarettes.
read more; IMF conditions: The federal cabinet has approved the imposition of new taxes worth Rs 170 billion
Similarly, the general sales tax rate has been increased from 17% to 18%. In this regard, instructions have been issued to the field formations of FBR and after 12 pm on Tuesday, 18% rate of GST has been uploaded instead of 17%.
The tax rate has been changed in the VBock system which has automatically started charging the new rates.
For the mini-budget, the government has also approved 25 percent GST on hundreds of luxury goods.
The FBR has increased the GST rate on all these imported luxury goods, which were banned by the Ministry of Commerce some time ago.
Sources say that the government’s preparations to raise the duty rate on luxury items to 25 percent have been completed, and there is a possibility of revenue of 60 to 70 billion rupees by taxing luxury items in the mini budget.
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