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Tuesday June 18, 2024

Which commodities will get expensive following 'mini-budget'?

Incumbent government has unveiled a 'mini-budget' to generate Rs170 billion in revenue

By Ashraf Malkham
February 16, 2023
A vendor stands at a kids toys shop in a market in Karachi on February 15, 2023. — APP
A vendor stands at a kid's toys shop in a market in Karachi on February 15, 2023. — APP

The incumbent government has unveiled a 'mini-budget' to generate Rs170 billion in revenue — in line with the International Monetary Fund's (IMF) demands to impose further taxes on inflation-stricken people.

The Federal Board of Revenue (FBR) has issued an SRO, increasing the standard 17% general sales tax (GST) to 18%, for collecting taxes worth Rs115 billion, while the remaining Rs55 billion will be generated through other measures in connection with the Finance (Supplementary) Bill 2023.

In the notification, the top tax collection authority mentioned that the 18% GST would be applicable to consumer packaged goods, which cover a host of items that are used in everyday life.

After an increase in the GST, the following items will get expensive:

  • Edible oil
  • Biscuits
  • Jam
  • Jelly
  • Noodles
  • Children's toys
  • Chocolates
  • Coffee
  • Make-up
  • Shampoos
  • Creams
  • Lotion
  • Soap
  • Toothpaste
  • Hair colour
  • Hair remover cream
  • Hair gel
  • Shaving foam
  • Shaving gel
  • Shaving cream
  • Shaving blades
  • Computers
  • Laptops
  • Electronic gadgets
  • Smartphones
  • iPods
  • TVs
  • LEDs
  • LCDs
  • Juicers
  • Blenders
  • Other electronic machinery
  • Car shampoos
  • Car polishes
  • Perfumes
  • Branded perfumes

Apart from these measures, the government will increase GST on luxury items from 17% to 25%. Federal Excise Duty (FED) on business and first-class air tickets will be increased to Rs20,000 or 50% — whichever is higher.

Ten per cent withholding adjustable advance income tax will also be imposed on marriage halls. The FED on soft and sugary drinks and cement will also be moved up.