On Wednesday, the Economic Coordination Committee (ECC) authorized a 25% sales tax on domestically built automobiles, inflicting a blow to customers who were already grappling with inflation.
The committee’s meeting was chaired over by Dr Shamshad Akhtar, Federal Minister of Finance, Revenue, and Economic Affairs.
Under the approved regulations, a 25% sales tax would be paid on locally built automobiles valued at Rs 4 million or more, or with engines larger than 1400 cc. These actions, while intended to boost government income, are a huge blow to consumers who are already dealing with inflation.
The committee has also approved a more than 65 percent hike in gas prices, meeting another demand from the International Monetary Fund. The final clearance from the federal cabinet is pending, and if given, the raise would go into force on February 1, affecting both protected and non-protected consumers.
The tax burden on the people continues to rise, with gas prices set to rise by Rs 100 per mmbtu for protected users and Rs 300 per mmbtu for non-protected consumers. Those with high gas use would see a significant Rs 900 per mmbtu hike.
Furthermore, the CNG industry would incur an additional cost with an agreed rise of Rs 170 per mmbtu. Fixed costs will remain same for both protected and non-covered consumers.
The ECC has also approved the implementation of a consistent gas pricing for all urea fertilizer producers, ensuring a level playing field in this sector.
The committee authorized the proposal to sign a Share Subscription Agreement (SSA) between National Credit Guarantee Company Limited (NCGCL), Karandaz, and the Government of Pakistan via the Ministry of Finance.
The Ministry of Commerce gave a summary of revisions to “SRO 760(I)/2013-Import and Export of Precious Metal Jewellery and Gemstones Order, 2013” and “Import Policy Order 2022- Serial No. 16 of Part II, Appendix-B”.
The Economic Coordination Committee approved the proposals in principle and directed that a committee of representatives from the Ministry of Commerce, Ministry of Law, FBR, and SECP develop detailed proposals for this export-oriented policy reform aimed at opening up the service sector.
The ECC also accepted the Intelligence Bureau’s proposal for “Provision of Additional Funds of Rs.125 Million during the Current Financial Year” to address the Bureau’s growing needs in operations against terrorists and anti-state groups.
ECC accepted the Finance Division’s summary of “Approval of Technical Supplementary Grant for Provision of Rupee Cover for Remaining Funds Amounting to Rs. 7,621,756,096/- of 1st Tranche of Credit Lines of US $85 Million obtained from the World Bank”.