Federal govt raises sales tax to 25% on luxury items

F.P. Report

ISLAMABAD: While surrendering to another condition of the IMF in order to clinch the crucial deal with the global lender to avert default, the federal government has raised the sales tax to 25 percent on hundreds of items, on Thursday.

The Federal Board of Revenue issued SRO297 of 2023 Wednesday night to implement the last part of the Rs170 billion tax revenue measures to unlock the IMF tranche.

A 25 percent sales tax has been levied on hundreds of items including imported mobile phones, auto CBU, chocolate, juices, carpets, cosmetics, fish, footwear, fruits and dry fruits, furniture, ice cream, jam, jelly, leather jackets, tissue papers, ketchup, traveling bags, suitcases, weapons, pasta, musical instruments, frozen meat, door and window frames, decoration/ornamental articles, salon items like hair dryers, home appliances, sanitary and bathroom items, crockery and cornflakes.

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, and articles of jewellery and wristwatches.

The sales tax was also hiked 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 and locally manufactured or assembled double-cabin (4×4) pick-up vehicles.