Finance bill 2023: GST on luxury items to be raised to 25 percent

ISLAMABAD: To adhere to the conditions of the International Monetary Fund (IMF), the Federal Minister for Finance and Revenue Ishaq Dar proposed the Finance Bill on Wednesday in National Assembly, announcing to increase in the Government Sales Tax (GST) from 17 to 25 per cent on luxury items, ARY News reported.

Ishaq Dar proposed several amendments in Finance Supplementary Bill 2023, including an increase in the sales tax on luxury items to 25% from 17%, while the GST on other items are increased 1% and fixed at 18%.

An advance tax on air travel was imposed after which the tax for first-class and business-class passengers increased to Rs 50,000 or 20%. This decision has been made to promote domestic tourism.

READ: GOVT ALL SET TO PASS FINANCE BILL FROM PARLIAMENT TODAY

The finance minister in his address to add an advance income tax to marriage halls, commercial lawns, marques, and clubs by 10 % to bring more business under the tax net and increase the revenue of the government.

Moreover, the increase in federal excise duty on cement is fixed from Rs1.5/kg to Rs2/kg.

In addition to these changes, the minister announced to impose of federal excise duty on Trier 1 and Trier 2 cigarettes at Rs 16,500 and Rs 5,050 per thousand cigarettes respectively, meanwhile, a 10% tax is also imposed on the retail price of fizzy drinks.

Additionally, the sales tax on cell phones costing USD $500 has been increased to 25% from 17%. This move is aimed to promote local manufacturing.