The Federal government will present a mini-budget of Rs360 billion to the National Assembly Session today to approve the tax approximately on 144 goods at a 17 percent rate. According to a plan for the National Assembly, Finance Minister Shaukat Tarin will introduce a bill in the House. Prices for cell phones, stationery, packaged food, cosmetics are expected to increase as additional taxes will be levied on luxury goods and imported cars. In contrast, the government will also reduce the development budget to Rs 200 billion.
According to sources, after the passage of the mini-budget, prices, including energy, gas, and petroleum products, will rise due to the difficult conditions of the International Monetary Fund (IMF). Meanwhile, PM Khan convened three important meetings today to discuss the mini-budget, political and economic situation.
The issue of mini-budget:
One of the meetings is for parliamentary parties affiliated with the ruling Pakistan Tehreek-Insaf (PTI). Federal Information Minister Fawad Chaudhry had earlier said a separate cabinet meeting would be held on a mini-budget issue in which all government partners would be trusted. Opposition parties have stated they will not run in the by-elections in a bid to disrupt the government’s budget-friendly efforts to pass the mini-budget and legislation into parliament.
According to the Department of Finance’s proposal, the govt will tax an estimated 150 goods at 17%. Therefore, goods that are currently fully exempt from General Sales Tax (GST) or taxable at 5% to 12% will now be taxed at 17%. However, The tax rate on mobile phones is expected to increase from 10% to 15%. Meanwhile, the GST level for more than 1,000cc vehicles will increase to 17%, and the import duty on electric cars outside CBU conditions will increase from 5% to 17%. Business to business transactions will increase from 16.9% to 17%. The zero ratings obtained from the supply of raw milk from imported milk will be deducted and 17% tax-deductible.
Moreover, goods to non-tax retailers will be taxed at 17% tax. Since they will be taxed for the first time, there are no income estimates. The finance bill also stipulates that bread baked in bakeries, restaurants, grocery chains, and shops be taxed at 17%.
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