An ordinance increasing the value-added tax (VAT) and supplementary duties on over 100 products and services, including hotels, restaurants, telecommunications, internet, and soft drinks, has been issued.
These details emerged from an ordinance signed by President Mohammed Sahabuddin on Thursday (9 January).
On Thursday night, two ordinances were promulgated: the Value Added Tax and Supplementary Duty (Amendment) Ordinance 2025 and the Excise and Salt (Amendment) Ordinance 2025.
Following the issuance of these ordinances, the VAT department of the National Board of Revenue (NBR) released the relevant directives, making these changes effective immediately.
To meet the conditions set by the International Monetary Fund (IMF), the NBR has planned to increase and rationalise VAT on certain goods and services.
This proposal was presented in a report by the NBR at an advisory meeting, which subsequently received approval.
The increase in duties will affect several areas.
Previously, a 20% supplementary duty was levied on the use of mobile SIM or RIM cards.
This has now been raised to 23%, leading to higher costs for mobile calls and internet usage.
The VAT on bills from branded shops and outlets for ready-made garments has been increased from 7.5% to 15%.
Additionally, VAT on all types of restaurants has been raised from 5% to 15%.
Other items on the list of increased taxes include tissue, cigarettes, nuts, mangoes, oranges, grapes, apples, pears, fruit juices, any kind of fresh fruit, paint, detergent, liquor bills, potato flakes, plastic and metal frames for glasses, reading glasses, sunglasses, electrical transformers and the oil used in them, electric poles, CR coils, GI wires, and more.
Travel taxes have also been increased.
