The government is set to present a tax amendment bill — the Finance (Supplementary) Bill 2023 — in both houses of parliament today as it rushes to fulfil the conditions of the International Monetary Fund (IMF) to revive a stalled loan programme that the country needs to stave off default.
The session of the lower house of parliament will begin at 3:30pm, during which Finance Minister Ishaq Dar will present the bill. Separately, the Senate session will begin at 4:30pm.
The government was forced to head to parliament after President Arif Alvi “advised” the finance minister to take parliament into confidence over the Rs170 billion in new taxes that are being levied.
Soon after the president’s ‘refusal’, a cabinet meeting was convened to approve the tax amendment bill which would be tabled in both houses of parliament today, as per a statement issued by the PM Office after the meeting.
Following the cabinet meeting, in a later-night development, the Federal Board of Revenue (FBR) issued SRO178 to enhance a federal excise duty on locally manufactured cigarettes which would generate up to Rs60bn in taxes on tobacco products and the Finance Division issued a notification increasing the general sales tax by one per cent to 18pc. These measures would raise Rs115bn.
Since the government had agreed to a target of Rs170bn in new taxes with the IMF, the remaining amount of Rs55bn would be collected through an increase in excise duty on airline tickets, and sugary drinks and an increase in withholding tax rates after the Finance (Supplementary) Bill 2023 is approved by parliament today.
