ISLAMABAD - The government has decided to enhance taxes on cement, poultry, sugar, marble and mobile phones in the federal budget for the next financial year 2016-2017.
The federal cabinet on Monday had approved the budget, which set tax collection target at Rs3635 billion, as against the outgoing year’s target of Rs3104 billion.
The government will impose new taxes between Rs170 billion and Rs190 billion in the budget, and will also persist with the imposition of super tax on affluent and rich individuals, association of persons and companies earning income above Rs500 million in the next budget in order to rehabilitate the temporarily displaced persons (TDPs) of the operation Zarb-e-Azb.
The government will impose 4 percent super tax temporarily on all banks and 3 percent on other companies and individuals, having an annual income of over Rs500 million.
It would also increase the sales tax on the import of cell phones in the budget.
Sales Tax had already been doubled on the import of low price mobile phones from Rs150 to Rs300 in the last budget; on medium price mobile phones from Rs250 to Rs500, and on smartphones to Rs1000 from the existing Rs500.
Sources informed the government had also planned to impose Rs1/kg Federal Excise Duty on cement.
23-year exemption from Sales Tax and Federal Excise Duty will also be announced for the businesses linked to Gwadar Free Zone, while 40-year Sales Tax/FED exemption on materials/equipment, ship bunker oils for ships in Gwadar Port.
The government has also decided to exempt the import and local supply of pesticides and its ingredients from the Sales Tax in the budget.
Currently, the marble industry is mostly unregistered, and is not paying Sales Tax. This sector has electricity as a major input.
In order to bring this sector into the ambit of Sales Tax, it has been proposed to levy Sales Tax on electricity consumption basis.