Govt to Take Special Measures to Generate Rs. 120 Billion Tax Revenue

The government has decided to take three alternate taxation measures to generate an additional amount of Rs. 120 billion through amendments to the Finance Bill 2021.

  • The government may withdraw the proposal of abolishing withholding tax on banking transactions. The withholding tax on banking transactions is expected to be retained in 2021-22.
  • Raise 30-35 percent in the rates of the Federal Excise Duty (FED) on different slabs of cigarettes.
  • The government is likely to increase FED on beverages and aerated water.

Sources told Propakistani that the Federal Board of Revenue (FBR) will suffer a revenue loss of Rs. 100 billion following the withdrawal of budgetary proposal to impose FED on mobile phone calls and SMS @ Re 1 per call (call exceeding three minutes), and Re 0.10 per SMS.


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The government will also withdraw certain other revenue measures from the Finance Bill, 2021, having a revenue impact of Rs. 20 billion. The exemption granted to the inter-corporate dividend would be restored.

The government will decrease sales tax from 17 to 10 percent on cream, butter, yogurt, cheese, dairy powder and tea whitener, etc.

As a result of the withdrawal of these revenue measures, the total revenue loss to the government would stand at Rs. 120 billion. Therefore, the FBR will take alternate taxation measures to overcome this shortfall of Rs. 120 billion.



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