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The government has presented Rs18.9 trillion budget aimed at addressing concerns from the International Monetary Fund (IMF), heavily relying on new taxes. This budget introduces substantial price increases across various sectors such as petrol, milk (including infant formula), which will significantly impact household incomes.
In addition to these measures, changes in the sales tax system are expected to generate an extra Rs484 billion, contributing to inflationary pressures in Pakistan. Packaged milk, including infant formula, now incurs an 18% GST. Students face an 18% tax on stationary items and 10% on computers. DAP fertilizer and tractors are also subject to an 18% GST.
Further, an 18% sales tax has been imposed on imported vegetables, fruits from Afghanistan, and diagnostic kits used in hospitals, as well as on electricity and gas supplies to hospitals, generating Rs30 billion.
Moreover, a 10% GST is proposed on items like oil cake, poultry feed, tractors, cattle feed, and various seed meals, contributing to higher prices of essentials like cooking oil, milk, and chicken. Stationery and newspapers now carry a 10% sales tax.
Excise duties have also been revised upwards: cement now has an additional Rs1 per kg excise duty, while sugar faces an Rs15 per kg excise duty. The government has raised the petroleum levy significantly, from Rs60 to Rs80 per liter, with a target to collect Rs321 billion, making the new levy collection target Rs1.281 trillion.