Tuesday Jun 11, 2019
The federal government on Tuesday unveiled a Rs7,022 billion austerity budget for the fiscal year 2019-20, setting ambitious tax revenue targets to stabilise a faltering economy in the budget.
State Minister for Revenue Hammad Azhar presented the budget setting Rs5,555bn target for the Federal Board of Revenue — a 25% or Rs1.12 trillion increase in additional taxes from the previous year.
The government suggested an increase in taxes on cooking oil, ghee, sugar, juices and soft drinks, cigarettes, compressed natural gas (CNG), liquefied natural gas (LNG), cement and cars. Apart from these, taxes on marble, gold, silver, diamonds and jewellery have also been increased.
During his budget speech, Azhar said the 8 per cent sales tax on sugar has been increased up to 17 per cent, after which the price of sugar is likely to be increased by more than Rs3.5 per kg.
He said the duty on cooking oil, ghee and drinks with sugar has also been increased to 17 per cent.
The new budget suggested imposing 10 per cent identical tax on milk, cream and powdered milk.
The budget suggested 17 per cent sales tax on semi-processed and cooked chicken, mutton and fish products.
The government imposed 2.5 per cent tax on vehicles up to 1000cc, 5 per cent on automobiles from 1001-2000cc, and 7.5 per cent on vehicles with more than 2000cc engine power.
The government increased CNG price for Region-1 from Rs64.80 to Rs74.04 per kg, whereas for Region-2 it was increased from Rs57.69 to Rs69.57 per kg.
Similarly, the federal excise duty on the import of LNG was increased to Rs10 per MMCFD.
The budget imposed 17 per cent sales tax on marble industry, besides increasing federal excise duty on cement from Rs1.5 per kg to Rs2 per kg.
According to the state minister for revenue, FED on upper slab of cigarettes has been increased from Rs4500 to Rs5200 per 1000 sticks.
He said the lower two slabs have been merged with a duty of Rs1650 per 1000 sticks.
A decrease in taxes on a few items was also suggested in the new budget. The government suggested ending 3 per cent value addition tax on import of mobile phones.
Apart from this, it suggested ending value addition taxes on all petroleum products imported by oil marketing companies.
The government also suggested export of goods to Afghanistan and Central Asian states with zero duty.