| Proposes to enhance tax rate on mobile phone calls to 15pc from 10pc | 17pc sales tax on bread, GST on foodstuff, sweetmeats supplied by restaurants, bakeries, caterers to be increased to 17pc from 7.5pc | Packed food items like flavoured milk, yoghurt, cheese, butter, cream, desi ghee will be taxed at 17pc

GST on silver, gold jewellery to be increased to 17pc from 1pc

Tax rate on import of oilseeds will be increased to 17pc from 5pc 

ISLAMABAD  -  The Pakistan Tehreek-e-Insaf (PTI) government Thursday announced that the so-called ‘mini budget’ will help generate Rs343 billion on the direction of International Monetary Fund (IMF), which would unleash new inflationary wave in the country.

The federal government has withdrawn tax exemptions to enhance tax collection in remaining six months (January to June) of the current fiscal year. The government has withdrawn tax exemptions worth of Rs112 billion in machinery, Rs160 billion in pharmaceutical and Rs71 billion in imported luxury items. 

The government has enhanced the tax collection target to Rs6.1 trillion from Rs5.8 trillion for the current fiscal year after introducing the mini budget. In the mini budget, the government has recommended to increase the General Sales Tax to 17 percent on dozens of goods, which were previously either fully exempted from GST or being taxed at 5 percent to 12 percent rates.

In major recommendations, the government has proposed to enhance income tax rate on mobile phone calls from 10 percent to 15 percent. Bill proposed to impose a 17 percent additional tax on imported mobile phones priced at $200 or above. 

The tax on the prices of Electric Vehicles parts would not be increased, though electric vehicles (EVs) up to 1800cc would be taxed at the rate of 12.5%. The tax rate for electric tractors, rickshaws, three wheelers, and electric motorcycles would stay at 1%. Hybrid electric vehicles up to 1800cc will also be taxed at a rate of 12.5%. The federal excise duty on vehicles up to 1000 cc has been increased to Rs100,000, on vehicles up to 2000cc has been increased to Rs200,000. The duty on vehicles above 2000cc has been increased to Rs400,000. The government has also doubled the vehicle registration fee and advance tax.

Breads prepared in bakeries, restaurants, food chains and shops will be taxed at 17 percent GST. Meanwhile, GST on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeat shops will increase from 7.5 percent to 17 percent. Imported edible vegetables will be taxed. Cereals and products of milling industry and red chilies not sold in retail packaging, and match boxes will be taxed. The tax rate on flavoured milk sold in retail packing under a brand name will be increased from 10% to 17%. The GST on yoghurt, cheese, butter, cream, desi ghee, whey, milk and cream sold in retail packing under a brand name will go up from 10% to 17%.

It has asked the Parliament to impose 17 percent GST on the import of goods and raw materials for preparations milk for infants, which was zero rated. Meanwhile, preparations suitable for infants will be taxed at 17 percent.

The government has decided to slap 17 percent GST on raw materials for pharmaceutical products.

The government has decided to tax machinery and equipment related to dairy products at 17 percent from existing 5 percent. Mobile phones will be taxed at standard 17 percent rate as against the fixed rate. It has also recommended to tax seeds, fruit and spores of a kind used for sowing, cinchona bark and import of sugarcane.

Under the mini budget, the government has recommended to tax goods imported by or donated to federal and provincial hospitals at standard 17 percent.  Goods supplied to hospitals run by the federal or provincial governments would also be taxed. Meanwhile, it has proposed to tax the goods imported by various agencies of the UN, diplomats, and diplomatic missions at 17 percent.

The import of all goods received, in the event of a natural disaster will also be subject to tax. 

Articles imported through post as unsolicited gifts will be subject to 17 percent tax. The government has also suggested to tax sewing machines at standard GST rate of 17 percent. The import of live animals, live poultry, meat of bovine animals, sheep and goat, fish and crustaceans excluding live fish would be taxes at 17 percent. However, their local supply would remain exempted.

Import of eggs including eggs for hatching and Import of live plants will be taxed. However, their local supply will remain exempted. In other recommendations, following commodities are proposed to tax including uncooked poultry meat, cotton seed and iodized salt. GST on ingredients of poultry feed, cattle feed, except soya bean meal will go up from 10 percent to 17 percent. Similarly, GST on machinery of poultry sector, multimedia projects and lithium iron battery would increase to 17 percent from different rates. The GST on silver and gold will increase from 1 percent to 17 percent and articles of jewellery to 17%.

Green house farming equipment will be taxed. Fans for dairy farms, fish feed, bovine semen, preparations for making animal feed will be taxed. Other goods, which are proposed to tax are sprinkler, drip, spray pumps equipment, raw cotton, single cylinder agriculture diesel engine, sunflower and canola hybrid seeds meant for sowing, combined harvesters up to five years old, oil cake and solid residue will have 17 percent tax. The local supply of locally produced crude vegetable oil will be taxed .The tax rate on import of oilseeds meant for sowing will be increased from 5% to 17%.

The government has also proposed to enhance rate of tax on import of plant and machinery having no compatible local substitutes to 17 percent from 10 percent. The import of POS machine will be taxed at 17 percent. The import of plant and machinery for the manufacturing of cell phones by local manufacturers will be subjected to the 17 percent GST.

Personal wearing apparel and bona fide baggage imported by overseas Pakistanis and tourists will also be taxed. The raw material and intermediary goods for in-house consumption will be subjected to tax. Compost (non-commercial fertilizer) produced and supplied locally will be taxed at 17% rate ad imported plant, machinery and materials by Export Processing Zone will also be taxed. Personal computers, laptop computers, notebooks -- whether or not incorporating multimedia kit -- will also face the new taxation.