After the federal cabinet approved the mini-budget of Rs. 170 billion, the administration has decided to seek Senate and National Assembly approval of the Supplementary Finance Bill 2023 tomorrow (Wednesday).
Sources told ProPakistani on Tuesday that the government is empowered to impose regulatory duties and additional customs duty (ADCs) on the import of luxury/non-essential items through statutory regulatory orders (SROs) with immediate effect without waiting for the signing of the Tax Laws Amendment Bill 2023 by the president.
If the Supplemental Finance Bill 2023 is referred to the Senate Standing Committee on Finance, the procedure leading up to the president’s signature would take a few days. Alternatively, if the National Assembly unanimously approves an executive order, the effective date of the bill might be February 15, 2023. It has been determined that the clearing of both the chambers will be taken on Feb 15 and thereafter assent by the president. The Supplemental Finance Bill 2023 will not be referred to the Senate Standing Committee on Finance in this instance.
Nonetheless, the Federal Board of Revenue (FBR) is authorised by law to make notifications to amend the tariff structure at the import stage, with cabinet permission.
Typically, the sales tax and excise measures would take effect the day after the president’s signature. Tariff rationalisation may be accomplished through notifications. However, income tax measures became effective on July 1st, with the exception of withholding taxes.
The proposed increase in the federal excise tax (FED) on sugary beverages will earn sixty billion rupees. The proposed withholding tax on banking transactions of non-filers would generate about Rs. 45 billion in revenue.
According to sources, the FBR has estimated a revenue effect of Rs. 65 billion for the February-June fiscal year 2022-23 (FY23) as a result of raising the basic sales tax rate from 17 to 18 percent.
The FBR has also suggested increasing the federal excise tax (FED) on imported and locally-assembled motor vehicles through the Tax Laws Amendment Ordinance in order to generate more income for the’mini-budget’. Under discussion is a revenue-generating move that would rationalise the FED rates on imported and domestically-assembled motor vehicles. Sources stated that the FED on cigarettes will also be hiked in the mini-budget.
According to reports, the flood levy will be replaced by regulatory fees and extra customs taxes.
According to the sources, the Tax Laws Amendments Ordinance, 2023 would feature a one percent rise in the regular sales tax rate from 17 percent to 18 percent, as well as a withholding tax on the banking activities of non-filers.
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