Daily Times

ISLAMABAD: According to reports, the Federal Board of Revenue (FBR) has delivered a draft of the updated finance bill to the Ministry of Law for the presentation of the mini-budget.

The financial bill would be brought to Cabinet after the law ministry approves it, according to sources.

According to reports, the updated financial bill includes a proposal to eliminate an Rs350 billion tax exemption, as well as changes to the Tax Laws (Fourth) Amendment Bill.

In addition to this, amendments in schedules fifth, sixth, seventh, eighth and ninth have been proposed to eliminate tax exemptions.

According to sources, the target of the petroleum development levy will be reduced from Rs600 billion to Rs356 billion, while tax exemption on mobile phones, stationery and packaged food items is likely to be abolished.

They said that apart from exports, sales tax exemption will also be withdrawn from zero-rating, while a sales tax rate of 17% will be applicable on items on which sales tax exemption is more.

Tax exemptions for certain sectors are also likely to be scrapped.

Per sources, the revenue board has proposed to give the power to increase or decrease the petroleum development levy to the Prime Minister and has proposed to raise the tax collection target from Rs5,829 billion to Rs6,100 billion.

Moreover, a reduction of Rs200 billion in the development programme has also been proposed by the FBR.

They also claimed that the amendment bill includes a proposal to increase or abolish import duty on imported food for dogs and cats, as well as a proposed hike in tax rates on vehicles greater than 800cc and a ban on the entry of luxury vehicles.

The paper also proposes raising cosmetics duties and prohibiting the import of canned foods.

According to sources, the government must approve the mini-budget by January 12 as part of the agreement with the International Monetary Fund (IMF) programme.