Dar tables mini-budget to unlock IMF funding

Finance Minister Ishaq Dar on Wednesday tabled the Finance (Supplementary) Bill, 2023, in both houses of the parliament, outlining tax measures to raise an additional Rs170 billion in the next four and half months to meet the last prior actions agreed upon with the International Monetary Fund (IMF) to secure early disbursement of about $1.2bn instalment. Two measures — raising the federal excise duty (FED) on cigarettes and increasing the general sales tax (GST) rate from 17 per cent to 18pc — have been immediately implemented through statutory regulatory orders (SROs). The Federal Board of Revenue (FBR) expects to generate Rs115bn from these two measures. The finance bill, generally known as the mini-budget, also proposes increasing GST from 17pc to 25pc on 33 categories of goods covering 860 tariff lines — including high-end mobile phones, imported food, decoration items, and other luxury goods. However, this raise will be notified through another notification. Through the finance bill, the excise duty on cement has been raised from Rs1.5 to Rs2 per kilogram, a measure estimated to fetch another Rs6bn.