16/10/2021
FBR to Earn Billions by Withdrawing Sales Tax Exemptions on Mobile Phones
Posted 12 hours ago by ProPK Staff
FBR | Cellphones | ProPakistani
The Federal Board of Revenue (FBR) is expected to generate Rs. 27 billion from the withdrawal of concessionary sales tax rates on mobile phones under the ongoing exercise of withdrawal of sales tax exemptions during 2021-22.
Advertisement
At present, the Ninth Schedule of the Sales Tax Act is dealing with the sales tax rates on mobile phones.
ALSO READ
PSM Revival Process Likely to Complete by 3rd Quarter of FY2021-22
Sources told ProPakistani said that the government would impose a 17 percent sales tax on cellular mobile phones in CKD/CBU form under the Ninth Schedule of the Sales Tax Act 1990. All these taxation measures are part of the exercise to generate additional revenue of Rs. 330 billion from the withdrawal of exemptions during the current fiscal year. However, it was informed that the government may not abolish all sales tax exemptions of Rs. 330 billion in one go. Some would be withdrawn through the Presidential Ordinance and the remaining on the next budget due to inflationary implications on the general public.
The FBR data revealed that the sales tax zero-rating under the Fifth Schedule of the Sales Tax Act has a revenue impact of around Rs. 12.887 billion. In case the major sales tax gets zero-rating under the Fifth Schedule of the Sales Tax Act, the FBR would generate additional revenue to the tune of Rs. 12 billion.
Out of the estimated revenue of Rs. 330 billion to be generated from the withdrawal of sales tax exemptions, a major amount would come from the imposition of the standard rate of 17 percent sales tax on imports and local supple stages of the five leading export sectors during 2021-22. The withdrawal of reduced rates of sales tax of 10 percent would generate additional revenue of Rs. 69 billion. This is possible after the imposition of a 17 percent sales tax on items subjected to reduced rates of 10 percent.
