Govt Plans 18% Sales Tax on Exporters in Major Policy Shift

The Federal Board of Revenue (FBR) says the upcoming budget includes an 18% sales tax on imported raw materials, the same as what local raw materials have been taxed for the past year.
With this measure, both 1 percent of total sales and the standard 29 percent income tax must be paid by exporters, said Express Tribune.
Because there is ambiguity regarding the revenues from the standard tax regime, the IMF wants Pakistan to maintain the 1 percent minimum tax for another two to three years.
At a Standing Committee on Finance meeting in the National Assembly, FBR Member Tax Policy Dr. Najeeb Memon confirmed this. An added 1 percent tax is voted in, on top of the 29 percent that everyone pays.
The committee examined how the government raised the sales tax on raw materials for exports to 18 percent when drafting the last budget.
Syed Naveed Qamar, the Chairman of the committee, blamed the FBR for its weak efforts in collecting taxes. He put off giving his approval to the Income Tax Second Amendment Bill, which calls for the return of a 25 percent tax credit for teachers and researchers beginning on July 1, 2022, through tax year 2025. The assistance from this relief program will not be offered to those in private practice.