Federal Minister for Finance and Revenue Senator Ishaq Dar Wednesday introduced the Finance (Supplementary) Bill 2023 or the “mini-budget” in the National Assembly as the coalition government rushes to fulfil the conditions of the International Monetary Fund (IMF) to secure loan programme needed to avoid a default.
Addressing the lower house of parliament, the finance minister compared the performance of the previous PML-N and PTI governments.
The finance minister also announced to increase General Sales Tax GST rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes.
Mini-budget proposals
Govt has increased GST on luxury items from 17% to 25%
Increase in federal excise duty on cigarettes and fizzy drinks.
Increase in federal excise duty on cement
GST has been increased from 17pc to 18pc
Benazir Income Support Programme (BISP) handouts increased to Rs400bn from Rs360bn
FDE on business and first-class air tickets to now be Rs20,000 or 50% — whichever is higher
President summons NA, Senate sessions on Wednesday
GST to not be imposed on essential goods.
A session of the Senate has also been summoned to move the bill in the upper house. After the passage of finance bill from both houses, the bill will be then sent to President Arif Alvi for assent.
The federal government decided to pass the Finance Bill from the parliament, which is also being termed ‘mini-budget’, after President Dr Arif Alvi raised objections.
“The president advised that it would be more appropriate to take parliament into confidence on this important subject, and that a session be called immediately so that the bill is enacted without delay,” a statement issued by the President House said after the meeting.
n a late-night move, the federal government on Tuesday enhanced taxes on cigarettes with immediate effect to collect Rs115 billion out of the planned Rs170 billion mini-budget.
According to the notification issued by FBR, the standard rate of General Sales Tax (GST) has been jacked up from 17 to 18 percent with effect from February 15, 2023. The Federal Excise Duty (FED) on cigarettes has also gone up.
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The government has increased FED on expensive brands from Rs6.5 per cigarette to Rs16.5 – an increase of 153%. For less expensive brands, per stick increase is from Rs2.55 to Rs5.05 – an increase of 98%.