From SUVs to crockery! Pakistan's 25% sales tax hike on luxury goods makes lot of things expensive

Pakistan crisis: Shehbaz Sharif-led Pakistan government has hiked the sales tax on 33 categories of goods from 17 per cent to 25 per cent. These goods comprised items such as imported food, decoration items, high-end mobile phones, and other luxury goods.  The country's Federal Board of Revenue (FBR) issued a notice to implement the last part of the Rs 170 billion tax revenue measures with effect from March 8.

The Pakistan Democratic Movement (PDM) government, which is led by Sharif, has already announced tax measures in two phases – Phase 1 on February 14 and Phase 2 on March 1, the Pakistani newspaper Dawn reported. These tax hikes are a part of the Pakistan government’s efforts to complete the current $7 billion Extended Fund Facility programme with the International Monetary Fund (IMF) to tide over the current challenges posted by high inflation and high borrowing costs.

Items on which the exorbitant sales tax will apply: 

1. Food import: confectionary, jams and jelly, fish and frozen fish, sauces, ketchup, cornflakes, frozen meat, juices, pasta, fruits and dry fruits, preserved fruits, aerated water, ice cream and chocolates

2. Dog and cat food

3. Pet food

4. Vehicles in completely built-up units (CBU) conditions

5. Ship/aircraft designed or adapted for recreational or private use

6. Wristwatches

7. Jewellery

8. Sanitary and bathroom wares

9. Home appliances

10. Crockery

11. Cosmetics

12. Private weapons and ammunition

13. Shoes

14. Chandeliers and lighting (barring energy savers)

15. Headphones and loudspeakers

16. Doors and window frames

17. Travelling bags and suitcases

18. Carpets (except from Afghanistan)

19. Tissue paper, furniture

20. Shampoos

21. Luxury mattresses

22. Sleeping bags

23. Toiletries

24. Heaters

25. Blowers

26. Sunglasses

27. Kitchenware

28. Cigarettes

29. Shaving goods

30. Luxury leather apparel

31. Musical instruments

32. Salon items like hair dryers

33. Decoration/ornament articles

Besides these commodities, the GST on the supply of locally manufactured goods was hiked to 25 per cent. These goods included locally manufactured or assembled SUVs and CUVs, locally manufactured or assembled vehicles having engines of 1,400cc and up, and locally manufactured or assembled 4x4 pick-up vehicles. Federal excise duty on cigarettes and general sales tax was hiked from 17 per cent to 18 per cent through notices on February 14.

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