FINANCE (SUPPLEMENTARY) BILL, 2023

Salient features of the taxation measures are as under:-

1. Enhancing the general sales rate from 17% to 18% on goods imported or locally sold, other than those subject to sales tax at retail price (Third Schedule items). The relevant SRO issued by FBR seems to be applicable from February 14, 2023.

2. FED on cigarettes has also been increased through an SRO, applicable from February 14, 2023.

3. The Finance (Supplementary) Bill, 2023 besides ratification of the above, has inter alia also proposed to:

(i) Increase the general sales tax rate from 17% to 18% for Third Schedule items.

(ii) Increase sales tax on locally produced coal and imported mobile phones (of certain categories).

(iii) Increase / impose FED on: - aerated waters from 13% to 20% - cement from Rs 1.5 / kg to Rs 2/ kg - sugary drinks at 10%

4. Imposing adjustable withholding income tax on sale / purchase of shares of unlisted companies at the rate of 10% of FMV of such shares.

5. Reintroducing advance income tax on functions and gatherings.

6.  The FBR issued SRO 297(I)/2023 dated March 08, 2023 for applying sales tax rate at 25% on import and local supply of luxury goods.