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According to the Supplementary Finance Bill 2023, or Mini Budget, which Federal Finance Minister Ishaq Dar is due to table in Parliament, the target has been set to impose an additional tax of Rs. 170.
In order to meet the IMF's stringent requirements and reduce the budget deficit, the mini-budget proposed increasing the tax rate in various sectors.
According to him, the restoration of the IMF program is mostly possible with these measures, but everyday life may become more difficult due to the decrease in the income of ordinary people.
What tax measures were taken in the mini budget?
Additional tax revenue of 170 rubles was set as a target in the mini-budget presented by the Federal Minister of Finance.
The federal tax rate on cigarettes and spirits was increased, while the rate on cement was also increased from Rs 1.50 per kg to Rs 2 per kg.
In the income tax category, a 10 percent deduction has been set for marriages and other occasions, while on the other hand, a 10 percent deduction has also been set for the acquisition of shares.
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According to the federal government, milk, legumes, wheat, rice and meat are exempt from the sales tax increase.
Among the tax measures in the mini-budget presented by Pakistan's Finance Minister Ishaq Dar, the sales tax rate will increase from 17 to 18 percent.
According to economists, an increase in the sales tax rate actually leads to an increase in the inflation rate, because the sales tax is levied on consumption, that is, the use of goods, and this increase increases the prices of goods whose price is normal. . value. User must pay.
Economist Dr. Ashfaq Hasan Khan told the BBC that the increase in the VAT rate will lead to an increase in the price of daily necessities.
He said that sales tax is levied on the sale of goods from the import stage. This means that additional sales tax has to be paid when importing an item, which makes the imported item more expensive.
Likewise, the sales tax rate for the sale of domestically manufactured goods has been increased, meaning that the consumer has to pay an additional price when purchasing the goods.
additional sales tax, he said that sales tax is levied on things that are supplied in packages.
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He said that the things exempted are open sales, so it is not correct for the government to claim that things used by the common man are exempted.
Even Sana Tawfiq, an expert on economic affairs, said that items exempted from additional sales tax are sold openly, but there are many items that are of general use and are exempted. However, the additional sales tax must be paid by consumers.
tea, cooking oil, etc. are also ordinary consumer goods for which additional tax must be paid".
The rate of excise duty on cement has been increased, which means that construction costs will also increase and this will also affect the common man.
He said that the increase in GST will also increase the charges for mobile phone data, hence the charges for calls and internet usage, which is an important need of a common man these days.
"Currently the prices of raw materials and energy products have fallen in the international market, otherwise domestic consumers would have to pay a lot due to their high prices due to the depreciation of the rupee and additional sales tax.
Tauseef Ahmed, senior vice president of the Karachi Chamber of Commerce and Industry, said that sales tax has been increased in all sectors. This means that the raw materials used in the industry are also affected and the production costs of the industry increase, which are inevitably passed on to consumers.
According to him, "the additional sales tax will hit the common man more because he is the final consumer".
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