Federal Finance Minister Ishaq Dar introduced the Finance Bill (Supplementary) the “mini-budget” in the National Assembly in order to meet IMF Conditions for the approval of the loan program needed to avoid a default.
While addressing the Parliament, the finance minister compared the performance of the previous PML-N and PTI governments.
The finance minister also announces to increase General Sales Tax GST rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes and Tobacco in order to fetch an additional Rs115 billion out of Rs170 billion agreed to by Pakistan in line with the IMF conditions.
- Govt has increased GST on luxury items from 17% to 25%
- Increase in federal excise duty on cigarettes and fizzy drinks.
- Increase in federal excise duty on cement
- GST has been increased from 17pc to 18pc
- Benazir Income Support Programme (BISP) handouts increased to Rs400bn from Rs360bn
- FDE on business and first-class air tickets to now be Rs20,000 or 50% — whichever is higher
- GST is to not be imposed on essential goods.
Credible Sources at the Ministry of Finance told that they expect the bill to be ascended by Thursday morning, which will pave the way not only for the IMF monies but funds from multi-laterals and bilateral.
According to the latest details, A session of the Senate has also been summoned to move the bill to the upper house. After the passage of the finance bill from both houses, the bill will be then sent to President Arif Alvi for approval.
President Dr. Arif Alvi raised objections to the mini-budget after which the federal government decided to pass the Finance Bill from the parliament.
“The president advised that it would be more appropriate to take parliament into confidence on this important subject and that a session be called immediately so that the bill is enacted without delay,” a statement issued by the President House said after the meeting.
Earlier the Federal Government enhanced taxes on cigarettes with immediate effect to collect Rs115 billion out of the planned Rs170 billion mini-budget.
According to the notification issued by FBR, the standard rate of General Sales Tax (GST) has been jacked up from 17 to 18 percent with effect from 15 February 2023. The Federal Excise Duty (FED) on cigarettes has also gone up.
The government has increased FED on expensive brands from Rs6.5 per cigarette to Rs16.5 an increase of 153%. For less expensive brands, the per stick increase is from Rs2.55 to Rs5.05 – an increase of 98%.