Pakistan govt raises sales tax on luxury items to 25% to access IMF fund

The Pakistan government has hiked sales tax from 17 per cent to 25 per cent on select luxury goods, media reports said on Thursday, as the cash-strapped country was taking steps to unlock the USD 1.1 billion tranche of funding from the IMF.

The International Monetary Fund (IMF) is refusing to release the USD 1.1 billion tranche under the USD 7 billion loan facility unless crucial decisions are made by the government and implemented.

The Federal Board of Revenue (FBR) on Wednesday issued a Statutory Regulatory Order (SRO) for a 25 per cent imposition of General Sales Tax, The News International newspaper reported.

The sales tax hike includes 33 categories of goods covering 860 tariff lines, high-end mobile phones, imported food, decoration items, and other luxury goods, the Dawn newspaper reported.

GST has also been imposed on three categories of locally manufactured goods.

Twenty-five per cent GST has also been imposed on three categories of locally manufactured goods, including .