FBR Officially Notifies New Tax Laws

The Federal Board of Revenue (FBR) has officially issued a notification for the implementation of the new tax laws approved by the Parliament in the Finance (Supplementary) Bill.

It has released a circular for notifying the revised tax rates that took effect on 16 January.

The excise duty on imported vehicles with 1800cc—3000cc engines will be increased from 25 percent to 30 percent and the duty on imported vehicles with a capacity of 3001cc or more will be 40 percent instead of 30 percent. The tax on imported double cabin vehicles has been raised from 25 percent to 30 percent.

A 17 percent sales tax has been levied on imported food, plant, and machinery. Live animals, poultry, and industrial items are now being taxed at a rate of 17 percent. Imported meat, poultry, eggs, seeds, and agricultural products will also be taxed at a rate of 17 percent. The Greenfield industry has also been hit with a 17 percent GST on plant and gear.

Large bakeries, restaurants, fast-food chains, and dessert stores all charge a 17 percent tax. However, local supplies of grains, meat, poultry, fruits, and vegetables will remain tax-free.

A notice has also been issued for sales tax to be raised on high-priced imported cellphones. Moreover, mobile phones with a value of more than $200 will be subject to a 17 percent GST as well. Imported mobile phones were previously subjected to a flat tariff of Rs. 1,740 to Rs. 9,270.

The cottage industry’s annual turnover has been cut from ten million to eight million, and the imports of fruits and vegetables from Afghanistan will continue to be tax-free.

A new Directorate-General for digital invoicing and analysis will be established according to the FBR. Businesses that are not linked to a computerized system may be shut down, and the National Identity Card is no longer required for debit, credit cards, or digital payments.

The sales tax on gold, silver, precious metals, and jewelry is 17 percent. Imported computers and laptops will be taxed at a default rate of five percent.

On the flip side, the usage of digital payments has been made mandatory for corporate taxpayers under the new tax laws. Payments must be made digitally using online portals or platforms, and this includes online bills, invoices, and card payments.