Essential goods will remain unaffected by the recent increases in value-added tax (VAT), supplementary duty, and excise duty, ensuring that their prices remain stable and do not contribute to inflation, said the National Board of Revenue (NBR).
"Some recent media reports concerning VAT, income tax, and customs duty, which had caught NBR's attention. In the public interest, significant tax concessions have been granted on essential commodities," NBR said in a press release on Saturday (4 January).
To enhance internal revenue collection, achieve Sustainable Development Goals (SDGs), and foster national self-reliance, NBR has undertaken several initiatives to expand the scope of VAT and rationalise tax rates.
Over the past four months, customs, VAT, and income tax concessions have been provided at the import, local, and business levels for eight essential goods, including rice, potatoes, onions, sugar, eggs, dates, edible oil, and pesticides, to increase their supply in the market and maintain price stability.
This has significantly reduced revenue collection. If revenue from other sectors is not increased, there will be a considerable budget deficit.
Consequently, NBR has had to implement special measures during the mid-term of the 2024-25 fiscal year to enhance revenue collection through the expansion of VAT coverage and the rationalisation of VAT, supplementary, and excise duty rates and amounts.
In addition to VAT, NBR has stated that various steps are being taken to expand the scope of income tax.
Gradual removal and amendment of tax exemption provisions are also in progress to phase out the culture of tax exemption.
