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Saturday, May 18, 2024

25% price hike on luxury goods

The government has raised the sales tax from 17% to 25% on 33 categories of goods such as high-end mobile phones, imported food items, decoration items, and other luxury goods.

The Federal Board of Revenue (FBR) issued a statement to implement the last part of the Rs170 billion tax revenue measures to unlock the IMF economic program. Similarly, the government has already notified the tax measures in two phases on Feb 14 and March 1.

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Luxury items 

The price of luxury items will experience a 25% hike in sales tax. The imported food items include confectionery, jams and jelly, fish and frozen fish, sauces, ketchup, fruits and dry fruits, preserved fruits, cornflakes, frozen meat, juices, pasta, aerated water, ice cream, and chocolates.

Furthermore, raw materials and vehicles in completely built-up units (CBU) conditions have also experienced a hike. The prices of sanitary and bathroom wares, home appliances, cosmetics, crockery, and pet food have also been raised. 

Additionally, private weapons and ammunition, shoes, chandeliers, lighting (excluding energy savers), headphones and loudspeakers, doors and window frames, traveling bags and suitcases, and carpets are also on the list of 25% GST hikes. 

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The high sales tax will also apply to a ship designed or adapted for use for recreation or pleasure or private use, an aircraft designed or adapted for use for recreation or pleasure or private use, articles of jewelry and wristwatches, luxury leather apparel, and musical instruments.

In addition to this, the GST was also raised on the supply of locally manufactured goods and locally assembled SUVs and CUVs, having engine capacity of 1,400cc and above, and double-cabin (4×4) pick-up vehicles.

Finance Minister Ishaq Dar introduced a mini-budget last month which highlighted imposing an additional tax of Rs170 billion in the next four and a half months to meet IMF’s demands to secure early disbursement of about $1.2 billion installment.