Implementation of New Taxation Commences Today in country
— July 1, 2024
ISLAMABAD (AIA) The government of Pakistan has enforced new taxation measures totaling Rs 1.761 trillion, effective July 1, 2024, through the Finance Act 2024. This includes an increased tax burden on the salaried class and significant indirect taxation on the general public, with new sales taxes on stationery items, dairy products, and poultry feed.
The Federal Board of Revenue (FBR) issued the Finance Act 2024, which includes amendments made in the Finance Bill 2024. The FBR has also rescinded customs and withholding tax-related notifications to abolish exemptions or zero-rating and reduced rates as of July 1, 2024.
In this regard, FBR issued nine Self Regulatory Orders (SROs) on Sunday. Since July 1, customs duty-related changes at the import stage have been implemented at ports. The Finance Act 2024 has introduced income tax measures of Rs 443 billion and a personal income tax (PIT) increase of Rs 224 billion; sales tax measures of Rs 485 billion; and Federal Excise Duty (FED) measures of Rs 289 billion. The Act has also implemented customs duty measures of Rs 70 billion.
Starting July 1, the government has withdrawn various exemptions or zero rating, and reduced or fixed rates. Therefore, from the start of the new fiscal year (2024–25), the FBR will charge sales tax on items where an exemption or zero rating has been withdrawn.
In addition to raising the excise duty on international air travel, an FED of Rs 15 per kg will be applicable to the supply of white crystalline sugar by any person to a manufacturing, processing, or packaging entity.
The government has also increased the FED on cement from Rs 3 per kg to Rs 4 per kg through an amendment in the Finance Bill. In budget (2024–25), the rate of FED on cement was increased from Rs. 2 per kg to Rs. 3 per kg. The government has imposed a 10% sales tax on poultry feed, 10% on tractors, 10% on oil residue, and 10% on edible vegetables from Afghanistan.
The government has raised taxes on both the salaried and non-salaried classes, real estate, retailers, and vehicles, removed Goods and Service Tax (GST) exemptions, and slapped taxes on milk and milk products, mobile phones, and tier-1 retailers of branded stores at 18%.