The government raises the sales tax on imported goods to 25%, which was 17% before.
In order to achieve the final previous actions agreed upon with the IMF to secure early delivery of around $1.2 billion in installments, Finance Minister Ishaq Dar last month announced tax measures through the
Finance (Supplementary) Bill 2023.
Late on Wednesday night, the Federal Board of Revenue (FBR) issued SRO297 of 2023 to carry out the final step of the Rs170 billion in tax revenue measures needed to unlock the IMF tranche.
The tax measures were already announced by the administration in two installments, on February 14 and March 1.
On February 14, two policies—raising the federal excise tax on cigarettes and hiking the general sales tax rate from 17 to 18 percent—were put into effect through SROs.
With President Dr. Arif Alvi’s approval of the Budget Act 2023, more provisions went into effect on March 1.
The government increased the sales tax on 33 categories of goods, including
• High-end mobile phones
• Imported food
• Home decor items, and other luxury goods, from 17% to 25%. This affects 860 tariff lines.
The high-end items that fall under the category of imported food and are subject to a 25 percent sales tax include:
• Confectionery
• Jams and jelly
• Fish and frozen fish
• Sauces
• Ketchup
• Fruits and dry fruits
• Preserved fruits
• Cornflakes
• Frozen meat
• Juices
• Pasta
• Aerated water
• Ice cream
• Chocolates
• Vehicles in completely built-up units (CBU) conditions
• Sanitary and bathroom wares
• Home appliances
• Cosmetics
• Crockery
• Pet food
• Private weapons and ammunition
• Shoes
• Chandeliers and lighting (except energy savers)
• Headphones and loudspeakers
• Doors and window frames
• Travelling bags and suitcases
• Sanitary ware
• Carpets (except from Afghanistan)
• Tissue paper
• Furniture
• Shampoos
• Luxury mattresses and sleeping bags
• Bathroom ware
• Toiletries
• Heaters
• Blowers
• Sunglasses
• Kitchenware
• Cigarettes
• Luxury leather apparel
• Musical instruments
• Saloon items like hair dryers
• Decoration /ornamental articles
The high sales tax will also apply to:
• Dog and cat food,
• A ship designed or adapted for use for recreation or pleasure or private use
• An aircraft designed or adapted for use for recreation or pleasure or private use
• Articles of jewellery
• Wristwatches
The GST was also raised to 25pc on the supply of locally manufactured goods:
• Locally manufactured or assembled SUVs and CUVs
• Locally manufactured or assembled vehicles having engine capacity of 1,400cc and above
• Locally manufactured or assembled double-cabin (4×4) pick-up vehicles
