ISLAMABAD: The Senate Committee on Finance has rejected the increase in the rate of General Sales Tax on formula milk, jewelry, and bicycles.
In its Thursday’s meeting, the Senate’s committee led by Senator Talha Mahmood examined the content of the Supplementary Finance Bill, 2021, (mini-budget) passed in the National Assembly in Dec 2021. In the mini-budget, the government has recommended increase in the rate of GST to 17% on milk and other items.
A member of the committee, Senator Farooq H. Naek said that out of 1,000 young children in Pakistan, 137 are dying due to malnutrition. He said, “Formula milk is a substitute for mothers who can’t breastfeed their children. We cannot allow the government to levy tax on the food of these infants, no matter what the IMF demands are.”
The committee also turned down the proposal of charging 17% GST on imported bicycles. However, the committee recommended that tax should be imposed on bicycles valuing over Rs25,000.
Meanwhile, the representatives of the Jewelers Association strongly opposed increase in taxes in the mini-budget with a view that the consumption of gold in Pakistan was 160 tons out of which 80 tons of gold were being smuggled. They pointed out that the import of gold has become difficult due to strict government conditions while there was no check on smuggling.
“In these circumstances, the government has decided to increase taxes on gold, diamond, and other jewelry from 3% to 17%.”
Worth mentioning is that the government is convening the National Assembly session on January 10 to pass the mini-budget.
The federal cabinet had already approved the supplementary finance bill, paving the way for an increase in the General Sales Tax (GST) on 150 items including formula milk, smartphones, computers, and vehicles, etc.
