Govt Introduces Fixed Minimum Sales Tax for Imports in Budget 2025

To enhance revenue collection and curb tax evasion, the upcoming fiscal budget of Pakistan for 2024-2025 has proposed to introduce a significant reform in the sales tax regime at the import stage. The government proposes setting a minimum value for sales tax on certain imported items, which is expected to address the issue of under-declaration by importers. This will help counteract the under-declaration practices that reduce potential tax revenue and the Federal Board of Revenue (FBR) will be authorized to determine this minimum value. This measure is anticipated to generate additional revenue of approximately Rs. 40 billion. The initiative aims to ensure fair tax practices and enhance government revenue without imposing new taxes on local industries. By targeting under-declaration, the government hopes to streamline import taxation and boost compliance, contributing to a more transparent and efficient tax system. This move is part of a broader strategy to improve the economic landscape and fiscal stability of the country, reflecting a commitment to effective governance and financial prudence. The anticipated revenue boost will be crucial for funding public services and development projects in the coming fiscal year. For live updates on everything about the Federal Budget, visit this link.