The Federal Board of Revenue (FBR) will impose 25 percent sales tax on the import of luxury items after seeking powers of the federal government to impose higher rates of sales tax.
Sources told ProPakistani that presently the FBR has no powers to impose 25 percent sales tax through a statutory regulatory order (SRO). Finance Supplementary Bill 2023 will give powers to the FBR to impose higher rates of sales tax. The powers will be available to the FBR after the signing of the Bill by the President.
The FBR will move a summary to the Cabinet and subsequently issue a notification to impose 25 percent sales tax on imports.
Under the Finance (Supplementary) Bill 2023, the standard rate of sales tax has been increased from 17% to 18% through SRO 179(I)/2023 dated February 14, 2023.
The amendment through SRO 179 is not applicable to goods subject to sales tax at retail price as specified in the Third Schedule to the Sales Tax Act, 1990. The SRO is dated February 14, 2023, in view of which it seems that the enhanced rate is applicable from February 14, 2023.
However, in view of the fact that the SRO was made public on February 15, 2023, keeping in view the principles laid down by the Supreme Court of Pakistan in its judgment reported as 2022 PTD 232, the applicability of SRO from February 14, 2023, can be questioned.
Furthermore, the legitimacy of the increase of rate through SRO can also be questioned in view of various judgments which have ruled that the power to levy tax remains with the Parliament.
The Finance (Supplementary) Bill, 2023 besides incorporating the effect of SRO 179, has also proposed to increase the sales tax rate from 17 percent to 18 percent for the goods specified under the Third Schedule which will be effective from the date on which the Act comes into effect.
It has further been proposed that Federal Government may by notification in the Official Gazette, charge sales tax, on goods specified in Third Schedule, on such higher rates as may be specified. It is expected that a separate notification in this respect will be issued later for certain goods specified in Third Schedule.
This damn country is living in fools paradise of calling many items asuxury items, no where in the world such term is used.. Our policy makers simply jerks, instead should make consistent and long term policies to earn revenue instead of knee jerk policies… Their own failures is causing easy way out to increase taxes