The government has finalised the mini-budget to the tune of Rs360 billion that would slap 17 per cent sales tax on about 140 essential consumable and industrial goods, in addition to increasing the income tax rates on phone calls by 50pc, as per a report by The Express Tribune.
The report claims that the plan was shared with Adviser to the PM on Finance Shaukat Tarin on Thursday which, once approved by parliament, would make everything expensive.
As per details, the prices of goods, including milk, cereals, bakery items, meat, chicken, gold, bicycles, cars including electric cars, mobile phones will rise.
On the other hand, the government has decided to increase income tax on cellular services from 10pc to 15pc to generate revenue worth Rs5 billion, the report by Tribune claims.
A major chunk of the revenue — around Rs300 billion — will be generated by slapping the tax at the import stage on nearly 80 items. The majority of these items are essential goods and do not fall in the category of luxury goods.
Some of consumer-sensitive goods that will also attract sales tax at import are raw materials for the manufacturing of medicines, cereals, live animals, birds and eggs, meat, fish, fresh vegetables, fish feed and animal feed and journals and periodicals.
Similarly, the machinery for renewable energy including solar, wind and nuclear power generation as well as machinery for mining and extraction of minerals as well as CKD kits for single cylinder engines will also be subjected to 17pc GST.
The hybrid electric vehicles above 1800cc are also proposed to be taxed at 17pc.
Further, the import of scrap, silver, gold in unworked condition, jewellery and various types of plant and machinery will also be subjected to 17pc GST.
About half a dozen goods that are currently taxable at zero rate would be subject to 17pc GST in a bid to raise Rs10 billion. These include the import of large ships for repair and maintenance, imported bicycles and imported infant formula milk.
Mobile phones that are currently subject to Rs1,740 to Rs,9270 per set fixed sales tax will be charged at 17pc standard rate aimed at generating Rs7 billion, the report states.
This will increase the tax burden of a high-end phone set from Rs9,270 to roughly Rs42,000 — a surge of Rs32,730 or 353pc, the report adds.
