The Pakistani government has introduced a comprehensive array of tax reforms in budget 2024-25, targeting everyday necessities and high-end goods to enhance revenue streams and tackle illegal practices.
The reforms entail the elimination of sales tax exemptions and concessional rates, paving the way for standardized rates across various product categories.
Luxury vehicle imports, particularly those exceeding $50,000, will no longer enjoy import tax exemptions. Instead, they will face heightened taxes and duties. Conversely, import duties on glass products will be waived, while those on steel and paper products will undergo an increase.
Stringent measures are being enforced against the sale of counterfeit cigarettes, with shops engaging in such activities facing closure and potential legal repercussions. Additionally, a substantial tax of Rs 44,000 per kilogram is being imposed on cigarette filter materials, commonly employed in counterfeit products.
To bolster revenue from the construction sector, the Federal Excise Duty (FED) on cement is being raised from Rs 2 to Rs 3 per kilogram. Furthermore, a new 5% FED will be levied on new residential and commercial properties.
In the textile and leather sectors, GST rates on branded clothes and shoes are set to rise to 18%, impacting retailers.
