What items will become expensive after the mini-budget is approved?


Men wearing face masks shop for groceries at a store ahead of the holy fasting month of Ramadan, amid the coronavirus disease (COVID-19) pandemic, in Peshawar, Pakistan, April 9, 2021. Reuters / File

ISLAMABAD: The federal government presented Thursday to Parliament the additional finance bill for the withdrawal of exemptions from the general sales tax (GST) and the imposition of a 17% tax on nearly 150 items.

According to the details of the bill, a 17% GST will be imposed on 140 essential consumer and industrial goods.

Here is a list of items that will experience a rise in prices following the approval of the amending finance bill – described by the opposition as a “mini-budget”.

  • Imposition of an advance tax on fictions and television series produced abroad as well as on advertisements featuring actors from other countries (PKR 3 min per episode on plays and PKR 5 min per second on actors);
  • A 17% GST will be imposed on items sold in bakeries, restaurants and confectionery, food served in in-flight kitchens, sausages and locally produced poultry meat products, crude vegetable oil, over-the-counter grains and red peppers.
  • The import tax rate for oilseeds will be reduced from 5% to 17%.
  • The GST on silver and gold will drop from 1% to 17%.
  • Goods received as a gift from a government or foreign organization will be taxed at 17%.
  • Items sold in bags will be subject to a 17% GST compared to 8% previously.
  • Seeds, plants, tools and chemicals used in agriculture will also be subject to the 17% GST.
  • 10% sales tax to be imposed on imported vegetables.
  • 10% tax to be collected on flour mills.
  • 5% tax on fitness centers, laundries, beauty salons, travel agencies, industrial machine workshops and automotive workshops located in ICT.
  • A 5% tax will be levied on imported laptops, personal computers and notebooks.
  • It is proposed that cottonseed be taxed at 17% GST.

Telecommunications and Information Technology

  • The finance bill proposes an increase in the income tax on cellular services (mobile phone calls) from 10% to 15%.
  • Proposes a 5% increase in the withholding tax (WHT) on telecom services.

Auto parts assemblers and manufacturers

  • The sales tax on batteries will be reduced from 12% to 17%.
  • The GST will be increased on locally manufactured cars above 850cc from 12.5% ​​to 17%.
  • Services provided by car / car dealers in ICT will be taxed at 5%.
  • The 17% GST will be imposed on hybrid electric vehicles over 1,800 cc.

Pharmaceutical

  • Imposition of 17% GST at the import stage on drug raw materials.

Food and dairy products

  • A 17% GST will be imposed on processed milk and dairy products sold in branded packaging as well as on items sold in restaurants and confectionery.
  • A 17% GST will be imposed on imported animals and livestock.
  • A sales tax of 17% will be levied on poultry machinery.
  • A 17% GST will be imposed on imported infant formula, which is not currently subject to any GST.