PM rejects FBR’s carbon tax on petrol, sales tax hike proposals

Directs FBR to seek alternatives to avoid inflationary impact on public

Prime Minister Shehbaz Sharif has rejected a proposal from the Federal Board of Revenue (FBR) to impose an 18% “Carbon Tax” on petroleum products.

As per reports, the prime minister also turned down FBR’s proposal to raise the standard sales tax rate from 18% to 19%.

The FBR proposed a one per cent increase in the sales tax rate to generate an additional revenue of Rs40-50 billion in the fiscal year 2024-25. However, the prime minister rejected the proposal due to its immediate inflationary impact on the public.

PM has directed the tax body to improve enforcement and administrative measures and draft alternate proposals targeting untaxed or under-taxed sectors of the economy. He also instructed the FBR to propose increased taxes on non-essential and luxury items, sources said.

Out of the total proposed measures of Rs1,200 billion to Rs1,300 billion by the FBR, the government is expected to approve measures worth nearly Rs400-500 billion, sources said.


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