The fixed tax on traders that was included in the budget has been scrapped, and millions of consumers will no longer be subject to fuel adjustment costs (FCA) on their energy bills, according to Prime Minister Shehbaz Sharif.
On Tuesday, while on a two-day official visit to Doha, Prime Minister Shehbaz declared, “The economy was on the verge of default… but now thanks to the efforts of coalition partners we have averted this danger.”The premier acknowledged that the fixed tax that had been placed on dealers was flawed, but he denied wanting or ordering the finance ministry to do so.
The fixed tax was implemented in opposition to our vision. I’ve established a committee to determine who is responsible for this, he continued.
“[Waiver] will result in a Rs42 billion tax revenue shortfall.”
But we won’t do anything that makes it tough for our tiny traders,” he said. “Traders shouldn’t fret right now about this tax. It has been taken back.In response to inflated electricity rates, PM Shehbaz claimed that fuel adjustment charges, which are based on international fuel prices, experienced an astronomical surge as a result of which extra fees were added to the electricity bills.
According to [PML-N supremo] Mian Nawaz Sharif’s orders, we have decided to waive additional costs off the electricity bills of 17 million people out of a total of 30 million, the premier added. “I took notice of this [inflated electricity prices].
He also mentioned difficulties in implementing economic policies, claiming that the IMF must be consulted by the government.
Traders, transporters, and Pakistani diplomats stationed overseas were all offered concessions by a relief-loaded law that President Arif Alvi issued on Monday, but smokers were charged to cover these costs.
A week before the IMF is scheduled to consider Pakistan’s request for the completion of the two remaining assessments for the release of the $1.2 billion tranche of the loan programme, the president signed the Tax Laws (Second Amendment) Ordinance, 2022.
The government has suffered a loss of Rs75 billion as a result of tax relief or the authorisation of additional spending after the budget was approved. However, the gross revenue measures, due to regulatory tariffs on imports (ranging from Rs6 billion to Rs14 billion), charges on cigarettes, and lower rates.
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On Monday, the federal cabinet separately approved the application of regulatory charges on imports that may be as high as 100%.
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The government removed Rs42 billion in taxes from the traders through the presidential edict, but they also put in place mechanisms to reclaim Rs23 billion from them, giving the shops a net benefit of about Rs19 billion.