Govt set to impose Rs100bn taxes in mini-budget


—FBR proposes 5 to 10% regulatory duty and 1% customs duty on hundreds of imported items, including cars

—Also recommends ending income tax exemption for salaried persons

ISLAMABAD: The federal government is all set to impose over Rs100 billion in taxes by increasing 5 to 10% regulatory duty (RD) and 1% customs duty on hundreds of imported items, while it may also consider ending the tax exemption given by the last government to the salaried class as it presents its mini-budget in the National Assembly on Tuesday.

Finance Minister Asad Umar signed the tax amendment bill on Monday evening.

The Pakistan Muslim League Nawaz (PML-N) government had also imposed RD on around 500 imported items and a 1% additional customs duty on 7,200 imported tariff lines. The Federal Board of Revenue (FBR) believed that it would get Rs184 billion in taxes through these measures.

Sources told Pakistan Today that the government is likely to enhance tax on imported and vintage cars. Furthermore, it has been proposed to enhance the RD on imported phones from 12.5% to 17.5%. The FBR also recommended increasing the regulatory duty on car tyres from 12.5% to 14.5%, sources added.

The incumbent government is also likely to end the third slab on cigarette prices, as the FBR is losing its revenue.

The move comes as the government is struggling hard to curtail its import bill which has been recorded at around $37 billion by August 2018.

The former government had set the FBR’s tax collection target at Rs4.435 trillion for the fiscal year 2018-19. The current government will not decrease this as officials of the tax department believed that they would “easily attain the target during the current fiscal year”.


Sources revealed that the tax department has also recommended ending the tax exemption given by the last government to the salaried class as they have a narrative that this was a political move and the department never supported it.

The PML-N government had introduced a tax exemption for people with an annual income up to Rs1.2 million. The people have to pay Rs1,000 for an income up to Rs0.8 million from Rs0.4 million, and similarly, the salaried class earning between Rs0.8 million to Rs1.2 million was only paying Rs2,000.

The FBR had estimated during the budget exercise that the aforementioned concession had caused Rs100 billion revenue shortfall for the national exchequer.

Officials of the Planning Ministry said that the government will make a Rs400 billion cut from the Public Sector Development Programme (PSDP) in the revised budget as the last government had approved a development budget outlay of Rs1,001 billion.

The ministry has also proposed to end infrastructure, water and electricity projects. The prime minister’s sustainable development programme and special development fund have also been ended in the mini-budget.

It is pertinent to mention that the last government had allocated more than one half of the budget to infrastructure and China-Pakistan Economic Corridor (CPEC) projects.

The government has called a cabinet meeting and it will approve the mini budget-related proposals from the special session.

It is worth mentioning here that PTI and other opposition parties had earlier recommended the PML-N government to present the three-month budget but former premier Shahid Khaqan Abbasi had rejected the proposal and vowed to present a full year’s budget.