The planned 1 percent increase in the sales tax rate, moving it from 18 to 19 percent, will not be implemented through the upcoming Finance Bill 2024 due to concerns about its inflationary impact on the public. It’s anticipated that the rate will remain unchanged in the 2024-25 budget.
The Federal Board of Revenue (FBR) had recommended this 1 percent increase, estimating it would generate an additional revenue of Rs. 40-50 billion for the fiscal year 2024-25. However, Prime Minister Sharif rejected the proposal, citing the potential for immediate inflationary repercussions on the general populace.
Despite discussions between the FBR and top government officials regarding the sales tax rate, the proposal to raise it from 18 to 19 percent has been once again dismissed by the government. Therefore, the sales tax rate will continue at 18 percent in the next fiscal year (2024-25).
Prime Minister Shehbaz Sharif has firmly opposed the idea of increasing the standard sales tax rate from 18 to 19 percent.
