The federal government is ‘reviewing’ the enforcement of Federal Excise Duty (FED) on sugar to deal with the persistent tax shortfall, as reported by national media citing sources on Thursday.
According to a report by national media, the Federal Board of Revenue is likely to confront a revenue gap greater than Rs 50 billion in the current month of January 2025, while the authorities wish to address the tax shortfall issue ahead of the review for the second installment of the ongoing IMF loan program.
PM Shehbaz Sharif will review the proposals forwarded to levy Federal Excise Duty per kilogram of sugar, alongside suggestions to revise the mechanism currently implemented on sales tax collection. The Minister of State for Finance, along with others, has drafted the proposals for review.
The Chairman of the Federal Board of Revenue and the Secretary of the Ministry of Finance were also present when the proposals were being drafted. Media reports suggest that under the proposed amendments to tax laws, a fixed sales tax regime could be introduced to ensure a more structured process of tax collection.
A Federal Excise Duty worth Rs. 3 to Rs. 4 per kilogram can be imposed, leading to an increase in the retail price of sugar, affecting the public and masses. However, Prime Minister Shehbaz Sharif is yet to decide on the tax measures and give approval before implementing any Federal Excise Duty.
The government has already rejected any such claim, saying sales tax revisions are being reviewed, but there is no final decision yet, and Prime Minister Shehbaz Sharif has the final authority to address this issue. Authorities are hopeful that he will take an appropriate decision on the sugar issue in a satisfactory manner.
