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MINI BUDGET 2023
Salient Features of Sales Tax, Income Tax & Federal Excise |
The highlights of the mini budget or Finance Supplemental Bill, 2023, as presented on Wednesday in front of the National Assembly by Finance Minister Ishaq Dar, are listed below.
According
to an analyst at AKD Securities, the purpose of the supplemental finance law is
to put into effect the additional taxation measures that were agreed upon with
the IMF.
The salient features of the document
are as below:
• BISP allocation for FY 2023 increased
from PKR 360 billion to PKR 400 billion.
Amendments
to the Sales Tax Act:
• Sales tax on general items has been
increased to 18 per cent from 17 per cent.
• Sales tax on mobile phones with a value exceeding
US$500 will be set at 25 per cent, against 17 per cent earlier.
• Essential items (Wheat Flour, rice, egg, milk, chicken
and vegetable) are exempted.
• Sales tax on locally produced coal increased to 18
per cent or PKR 700/ton, whichever is higher (previously higher of 17 per cent
or PKR 700/ton).
Amendments to the Income Tax Ordinance:
• On the acquisition of capital assets, a 10 per cent
advance tax will be applicable on the gross amount of the purchase
consideration. In our view this does not apply to transactions carried out at
the PSX.
• A 10 per cent advance tax will be applicable on all functions
and gatherings including wedding events and seminars.
Amendments to the Federal Excise Act:
• FED on aerated water is proposed to be increased to
20 per cent from 13 per cent.
• FED increased on locally produced cigarettes.
• Locally produced cigarettes if their on-pack printed retail
price exceeds PKR 9,000 (from PKR 6,660) per 1000 cigarettes to PKR 16,500 (from PKR 6,500).
• Locally produced cigarettes if their on-pack printed retail
price does not exceed PKR 9,000 (from PKR 6,660) per 1000 cigarettes to PKR 5,050
(from PKR 2,050).
• Minimum price on cigarettes: No brand shall be priced and sold
at a retail price (excluding sales tax) lower than 60 per cent (previously 45
per cent) of the retail price.
• FED on Sugary drinks introduced at 10 per cent of retail price.
• FED increased on cement to PKR 2.0/kg (previously PKR l.5/kg).
• FED on air travel (club, business and first class)
has been increased to 20 per cent of the airfare or PKR 50,000/ ticket,
whichever is higher from the earlier held PKR 50,000/ ticket
