Business
What becomes expensive in mini-budget?
Mini-budget will increase or introduce taxes on smartphones, personal computers, and vehicles as well as tax on textbooks and stationery items would not be increased.
Islamabad: Finance Minister Shaukat Tarin on Thursday presented the Finance (Supplementary) Bill 2021 or the mini-budget in the National Assembly.
According to the copy of the Finance (Supplementary) Bill 2021, the mini-budget will increase or introduce taxes on smartphones, personal computers, and vehicles. Tax on textbooks and stationery items would not be increased.
It was reported that the government will impose a tax on approximately 150 goods at a rate of 17%. Goods that were currently either completely exempt from General Sales Tax (GST) or being taxed at 5% to 12% rates would now be taxed at 17%.
Phones
The bill proposes to impose a 17% additional tax on imported mobile phones priced at $200 or above.
Jewellery
Jewellery made of gold, silver or other precious metals or stones will be taxed at the rate of 17%, he said.
Computers
Under the bill, imported personal computers, laptops, and notes books, if imported as completely built units, would be taxed at a rate of 5%.
The document, however, says that tax would not be increased on locally manufactured computers, laptops.
Electric vehicles
Similarly, the tax on the prices of Electric Vehicles parts would not be increased, though electric vehicles (EVs) up to 1800cc would be taxed at the rate of 12.5%. The tax rate for electric tractors, rickshaws, three wheelers, and electric motorcycles would stay at 1%.
Hybrid electric vehicles up to 1800cc will also be taxed at a rate of 12.5%.
Cars become expensive
Owning a combustion engine car has also become expensive. The federal excise duty on vehicles up to 1000 cc has been increased to Rs100,000, on vehicles up to 2000cc has been increased to Rs200,000. The duty on vehicles above 2000cc has been increased to Rs400,000.
The government has also doubled the vehicle registration fee and advance tax.
Stationery
The tax on textbooks and stationery items remains unchanged. Earlier, there were reports that the government planned to jack up tax on textbooks and stationery items.
Tax on services on Islamabad
The government has proposed to impose taxes on several services in the federal capital, Islamabad.
People providing services in the sectors of information technology (IT), automobiles, health club, gyms or fitness centers, personal care, marriage halls, travel, auto workshops, and industrial machinery workshops will pay 5% GST if they are working in Islamabad.
Property dealers, realtors, and construction sector won’t be taxed, according to the draft bill.
Foreign TV dramas
The mini-budget levies advanced tax on foreign TV serials and dramas. A single episode of a foreign TV serial would be taxed Rs1 million and a one episode play would be taxed Rs3 million.
TV advertisement featuring foreign actors will also be taxed heavily. A 30 second ad would be taxed Rs15 million at the rate of Rs500,000 proposed in the mini-budget.
Imported food items
The government has abolished Rs215 tax exemptions on imported food items. A host of products ranging from frozen meat to vegetables and cereals to cheese will now be taxed.
There is a proposal to withdraw the rebate on imported machinery for the power sector.
Under the bill, Rs9 billion tax exemptions on zero-rated items have been abolished.
Prices to increase
According to the local media reports, the prices of power, gas and petroleum products will increase due to the mini budget that include tough conditions of the IMF, while taxes and duties on more than 1700 items will also be increased in the mini budget and taxes on all imported and luxury items will be increased.
Taxes and duties on luxury items, imported diapers, make-up items will be increased and taxes on imported and domestic vehicles will also increase.
The total revenue from taxes and duties will be Rs340 billion and sales tax rate is likely to be raised to 17%, while the tax rate on various items may increase from 5 to 7%. The federal excise duty (FED) on cars likely to increase 2.5 percent and sales tax on tractors is likely to increase by 5%.
Customs duties on imported clothing, footwear and perfumes are likely to be increased, while Sales tax on locally made goods is also likely to be increased from 12% to 17%.
It is pertinent to mention here that the bill was originally scheduled to be presented in parliament on Wednesday but the cabinet had deferred its approval due to desiring a threadbare discussion on it.
A session of the National Assembly held under the chair of NA Speaker Asad Qaiser. Speaker Asad Qaisar said that the bill will not be forwarded to the standing committee concerned. The House also adopted the resolution seeking extension in The Election (Third Amendment) Ordinance for 120 days.
During the session, the Lower House of the Parliament approved passed a resolution moved by Babar Awan, Adviser to the Prime Minister on Parliamentary Affairs, to suspend the rules. Later, Finance Minister Shaukat Tarin introduced the Supplementary Finance Bill 2021 (Money Budget) in the National Assembly.
Opposition staged protest and called for a boycott of the assembly and chanted anti-government slogans.
As Tarin presented the bills, opposition members chanted slogans and gathered before the chair.
The protest intensified when the government presented several ordinances for the approval. The opposition members claimed that the ordinances had already expired or lapses after completing 120 period and they could not be presented for the approval under the Constitution.
The treasury benches resorted to a tit-for-tat response.
Pakistan Peoples Party’s Shagufta Jamani and PTI’s Ghazal Saifi came to blows on the floor of the house.
Shagufta Jamani slapped the ruling PTI’s MNA in the session when the mini-budget Finance (Supplementary) Bill 2021 was presented in the current session.
The fight between the opposition and the government members broke out in front of the NA speaker's dice during the NA session.
The ordinance passed during the Thursday’s session included:
The Federal Government Properties Management Authority Ordinance, 2021
The Elections (Third Amendment) Ordinance, 2021
The Public Properties (Removal of Encroachment) Ordinance, 2021
The Pakistan Council of Research in Water Resources (Amendment) Ordinance, 2021
The Pakistan Food Security Flow and Information Ordinance, 2021
The Tax Laws (Third Amendment) Ordinance, 2021.