The Economic Coordination Committee (ECC) has approved a 25% sales tax on locally manufactured vehicles, dealing a blow to consumers already struggling with inflation on Wednesday.
The committee, the meeting of which was presided over by the Federal Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar.
Under the approved measures, a 25% sales tax will be levied on domestically produced vehicles, targeting vehicles priced at Rs 4 million or more or those with engines over 1400 cc. These decisions, while aiming to bolster government revenues, spell a significant blow to consumers already grappling with inflation.
The committee has also given its approval for a more than 65 percent increase in gas prices, fulfilling another demand from the International Monetary Fund (IMF). The final approval from the federal cabinet is awaited, and if granted, the hike will come into effect from February 1, impacting both protected and non-protected consumers.
The tax burden on the people continues to mount, as the increase in gas prices is poised to hit protected consumers with a Rs 100 per mmbtu hike, while non-protected consumers face a steeper Rs 300 per mmbtu surge. Those with substantial gas consumption will experience a substantial Rs 900 per mmbtu increase.
Moreover, the CNG sector is set to bear an additional burden with an approved increase of Rs 170 per mmbtu. However, there will be no changes in fixed charges for both protected and non-protected customers.
The ECC has also sanctioned the application of a uniform gas tariff for all urea fertilizer companies, introducing a level playing field in this sector.
The committee approved the proposal of signing a Share Subscription Agreement (SSA) between National Credit Guarantee Company Limited (NCGCL)”, Karandaz, and the Government of Pakistan through the Ministry of Finance.
Ministry of Commerce presented a summary regarding amendments in “SRO 760(I)/2013-Import and Export of Precious Metal Jewellery and Gemstones Order, 2013” and “Import Policy Order 2022- Serial No. 16 of Part II, Appendix-B”.
The Economic Coordination Committee agreed to the proposals in principle and directed that a committee comprising representatives of the Ministry of Commerce, Ministry of Law, FBR, and SECP formulate detailed proposals for this export-oriented policy reform targeting the opening up of the service sector.
The ECC also approved the summary of the Intelligence Bureau for “Provision of Additional Funds of Rs.125 Million during the Current Financial Year” to meet the increasing requirements of the Bureau vis-a-vis operations against terrorists and anti-state elements.
The summary of the Finance Division regarding “Approval of Technical Supplementary Grant for Provision of Rupee Cover for Remaining Funds amounting to Rs. 7,621,756,096/- of 1st Tranche of Credit Lines of US $85 Million obtained from the World Bank” was approved by ECC.
