Web Desk
The federal government of Pakistan is expected to maintain a 25% sales tax on luxury items in the upcoming fiscal year 2023-24 budget.
With a total outlay exceeding Rs13,800 billion, the FY2023-24 budget is scheduled to be announced tomorrow. The decision to incorporate the 25% tax on luxury items into the Finance Bill follows the government’s previous imposition of the tax in the mini-budget earlier this year.
Sources indicate that the government anticipates generating revenue between Rs45 to 55 billion from the sales tax on luxury items. Additionally, there are considerations to increase duties on mobile phones valued at more than 500 dollars in the upcoming budget.
Imported electronic items are likely to remain subject to a 25% sales tax, along with imported cosmetic items for women, including lipstick, mascara, face powder, hairdryers, hair straighteners, hair colors, hair vitamins, bleach cream, hair removal cream, and others.
Luxury items such as imported branded shoes, branded purses, imported sunglasses and perfumes, branded headphones, iPods and speakers, imported doors and windows, imported bath fittings, imported tiles and sanitaryware, sunglasses, shampoo, soaps, lotions, shaving gels, lights, carpets, and others are also expected to continue being taxed at 25%.
The sales tax on imported spring mattresses, pillows, mineral water, imported cars, chocolates, imported candies, toffees, imported frozen fish, mushrooms, and other items will also be maintained at 25%.
In summary, the federal government’s decision to retain a 25% sales tax on luxury items aims to generate revenue while ensuring a consistent tax framework for imported goods across various sectors.
