What will be more expensive now after the budget and what will be cheaper?

The government of Pakistan has proposed to increase the cost of internet and mobile phone calls in the budget for the fiscal year 2021-22. However, the abolition of federal excise duty on vehicles up to 850 cc and reduction in sales tax is likely to reduce the price by up to Rs 200,000.

The budget proposes to further increase taxes on all types of mobile phones coming from abroad.

One percent tax on freelance workers

Similarly, it has been proposed to levy one per cent tax on freelancers, after which those who run the channel through video sharing platform 'YouTube' will have to pay one per cent tax.

In addition, a 17% sales tax is being levied on online purchases.

After the budget was presented, Federal Board of Revenue (FBR) member Tariq Chaudhry briefed reporters on the technical aspects of the budget.

Internet and imported mobile phones are more expensive

The new budget proposes an increase in taxes for Internet and mobile phone users, which will impose federal excise duties on phone calls, Internet data and SMS lasting more than three minutes. And if the mobile user's call exceeds three minutes, an additional charge of Rs. 1 per call will be levied in addition to the existing rates.

Tariq Chaudhry said that at the current rates of internet, if more than five GB of internet is used, an additional tax of Rs. 5 per GB will be levied and with this move, the government will get Rs.

The government has announced an increase in taxes on telephone sets imported from abroad.

In this regard, FBR Member Policy Tariq Chopra said that regulatory duty is being imposed on imported telephone sets.

However, he suggested that the current holding tax on mobile phone services be reduced from 12.5 per cent to 10 per cent and after some time it be reduced to eight per cent.

Federal excise duty on telecom sector has been reduced from 17% to 16%.

Cheaper cars up to 850 cc

The new budget announces tax cuts for small vehicles. In addition, tax exemption has been given on the import of kits for local manufacturing of electric vehicles.

It is proposed to reduce the sales tax rate for electric vehicles from 17% to 1%.

Federal excise duty and value added tax were abolished on 850 cc locally made vehicles in the country. The sales tax rate on them was reduced from 17% to 12.5%.

CBU imports of electric vehicles have also been exempted from holding tax.

Concessions to various sectors

FBR Member Policy Tariq Chaudhry said that the value chain duties of the textile sector have been significantly reduced and concessions of Rs 11 billion have been given to the textile sector.

Similarly, Rs 11 billion has been given to HRC and stainless steel while Rs 6 billion has been given to chemical industry. Incentives of Rs. 2 billion have been given to the pharmaceutical industry. In addition, duties on raw materials for leather and poultry medical equipment have been reduced.

In addition, FATA and PATA have been exempted from federal excise duty on industry, while zero rate tax has been announced to increase exports of IT services.

The government has announced the abolition of federal excise duty on fruit juices, while tax exemption has been granted on imported paper for publication of the Holy Quran.

Tax exemption has been proposed for plant, machinery, equipment and raw materials for the IT zone.

New taxes imposed

According to the finance bill, the government has decided to bring the online marketplace into the tax net and has now imposed a 17% sales tax on online purchases.

The government has increased regulatory duties on tire imports. Duties on most food items have been increased to reduce imports. As a result, prices of imported human food and animal feed, including dogs, imported butter and cheese will rise.

In addition, prices of imported shampoos, perfumes, cosmetics, all kinds of imported prepared food, packaged goods, imported milk, cream, frozen imported meat, cereals, gold and silver will also go up.

Sales tax and holding tax are being imposed on lead batteries, reclaimed and used lead batteries manufactured in Pakistan.

New taxes on luxury products

According to the finance bill, new taxes of Rs 4 billion have been imposed on refineries, Rs 15 billion on auto industry and Rs 11 billion on luxury products.

Crude oil and other products have been removed from zero rating and 17% sales tax has been imposed which will enable the government to get Rs 38 billion.

The move to impose 17% uniform sales tax on LNG, gold, silver and flood country will fetch the government Rs 35 billion.

According to the finance bill, a total of Rs 215 billion would be generated from the imposition of sales tax and federal excise duty.

Discounts for Corona products

In the Finance Bill, the government has announced to continue tax exemption on import of Corona related products for another six months to combat the Corona epidemic.

The government has abolished customs duty on items used in manufactured food supplements, while customs duty on six life-saving drugs has been abolished.

12% holding tax abolished in the budget

The government has announced in this budget to abolish holding tax on 12 services. Earlier, only filers were exempted from holding tax when withdrawing cash. However, the withholding tax on cash withdrawals has now been abolished for all.

In addition, the holding tax on banking transactions other than cash has been abolished. The holding tax on remittances has also been abolished.

Air travel tickets are likely to be cheaper

In addition, the withholding tax on domestic and international air tickets, on extraction of minerals, on members of stock exchanges, on CNG stations, on petroleum products and on new investors and builders of special economic zones was abolished. Is

The government says investments in special technology zones and imports of goods have been tax-exempt. While special tax regime is being implemented for SMEs.

In addition, tax exemption is being given on the import of agricultural machinery and books.

Purchases of electronic vehicles and mobile phones are allowed under Roshan Digital Accounts.

Decision to document used car business

The government has decided to document the used car business in this budget. Because previously used car dealers were out of the tax net of any kind, however, documenting their business will bring them into the tax net.

Under this finance bill, additional withholding tax is being levied on those consumers whose electricity bill is more than Rs 25,000 per month and they are non-filers.

The government has also decided to tax the GP fund of government employees.

. (tagsToTranslate) News (t) Pakistan (t) budget 2021 22 (t) Budget Shaukat Tareen (t) Shaukat Tareen (t) PTI Govt

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