Proposed increase in rates of capital value tax on imported & locally assembled vehicles has been estimated to generate additional revenue of Rs 10 bn.
The Federal Board of Revenue (FBR) has proposed nearly Rs. 300 billion in new taxation measures to be implemented through the Tax Laws Amendments Ordinance, 2023. According to sources, the ordinance is expected to be promulgated within the next 7–10 days.
The revenue impact was initially calculated at Rs 200 billion, but it has since been increased to Rs 300 billion. The proposed taxation measures withholding tax on non-filers’ banking transactions will generate nearly Rs 45 billion in revenue.
The 3% flood levy could generate Rs 60 billion in additional revenue. The proposed increase in the rates of capital value tax on imported and locally assembled vehicles has been estimated to generate an additional revenue of Rs 10 billion.
The proposed tax on banks’ foreign exchange earnings is expected to generate Rs 20 billion. The proposed Federal Excise Duty (FED) increase on sugary drinks would generate Rs 60 billion. The estimated impact of a further increase in the FED on cigarettes is Rs. 25–30 billion.
The proposed increase in the advance tax rate on the purchase or sale of immovable property would generate approximately Rs 20–30 billion. The proposed repeal of the sales tax exemption on the import of raw materials or inputs used in the manufacture of export goods under the “export facilitation scheme” will cost Rs 20–25 billion in revenue.
The proposals are being discussed by the FBR and the Ministry of Finance but have not yet been finalized. According to sources, the presidential ordinance would be promulgated after the proposals were approved.
Under the contingency revenue measures agreed upon with the International Monetary Fund (IMF), the government agreed to raise the FED on sugary drinks and cigarettes and withdraw sales tax exemptions to exporters if a month’s revenue collection data underperformed. FBR stands for Federal Board of Revenue is the principal tax collection agency of the Government of Pakistan.