President Arif Alvi on Monday signed the Tax Laws (Second Amendment) Ordinance, 2022 to increase the Federal Excise Duty (FED) of Rs 36 billion on tobacco industry and other measures including withdrawal of fixed tax on retailers imposed through the electricity bills under the Finance Act 2022.
The president gave approval to the Ordinance on the advice of Prime Minister Shehbaz Sharif under the Article 89(1) of the Constitution.
Under the Ordinance, the amendments have been made to Sales Tax Act 1990, Income Tax Ordinance 2001, Federal Excise Act 2005 and Finance Act 2022.
The amendment includes:
- Taxes worth Rs36 billion were imposed on tobacco industry
- The FBR will charge variable taxes to traders, starting with 5 per cent sales tax and 7.5 per cent income tax
- 5% sales tax will be applicable on small traders whose monthly electricity bill is Rs20,000
- Electricity bills of traders which are more than Rs20,000 per month will be applicable to a 7.5% tax
- Taxes exempted on an agricultural diesel engine, agricultural machinery, motor vehicle used for public transportation and carriage of goods
- The capital value tax (CVT) on commercial vehicles has been withdrawn.
- Income tax on diplomats “mistakenly imposed” in the federal budget abolished
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