ISLAMABAD: Following an agreement with the International Monetary Fund (IMF), the Economic Coordination Committee (ECC) of the Cabinet has levied taxes on more than 285 importable items and increased tax rates on almost all services.
The ECC, under the chairmanship of Finance Minister Ishaq Dar, has approved imposing Rs150 billion worth of taxes to overcome Rs200 billion revenue shortfall for the fiscal year 2014-15. The committee also endorsed drug pricing policy and export of wheat flour with a subsidy.
The ECC approved higher rates of withholding taxes (WHT) for importers and service providers who are non-filers of income tax returns, increasing rates by 1.5 per cent to 9pc on various sections.
Five per cent increase in regulatory duty on import of luxury items, including packaged foodstuff, chocolates, cosmetics and electric appliances, etc has also been approved.
Dar led ECC also imposed 5pc regulatory duty on import of furnace oil which is used by power plants for electricity generation. This alone is estimated to generate Rs8-10 billion in just five months.
The ECC also okayed 5pc regulatory duty on import of metal scrap, despite the international prices of metal scrap were consistently falling.
According to approved ‘Drug Pricing Policy’, effective July 1, 2016, annual increase in drug prices shall be linked with consumer price indicator (CPI) of the immediately preceding financial year. Manufacturers and importers could increase their existing maximum retail prices of scheduled drugs up to 50pc of CPI (with a cap of 4pc) and that of non-schedule drugs up to 70pc of CPI (with a cap of 6pc) once in any financial year.
