The Economic Coordination Committee (ECC) authorized a 25% sales tax on locally built vehicles on Wednesday, delivering a blow to households already grappling with inflation.
Dr. Shamshad Akhtar, Federal Minister for Finance, Revenue, and Economic Affairs, presided over the committee’s meeting.
Under the approved regulations, a 25% sales tax will be paid on domestically built automobiles valued at Rs 4 million or more, or those with engines larger than 1400 cc. These policies, while aimed at increasing government income, will deal a huge blow to consumers who are already dealing with inflation.
The committee also approved a more than 65 percent hike in gas prices, meeting another IMF demand.
The final clearance from the federal cabinet is pending, and if given, the raise will 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 consumption will see a significant Rs 900 per mmbtu hike.
Furthermore, the CNG sector would incur an additional burden with an agreed rise of Rs 170 per mmbtu. Fixed charges will remain same for both protected and non-covered consumers.
The ECC has also approved the implementation of a consistent gas tariff 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 recommendations in general and requested that a committee consisting of representatives from the Ministry of Commerce, Ministry of Law, FBR, and SECP develop concrete proposals for this export-oriented policy reform targeting the opening up of 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 elements.
ECC approved 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 the 1st Tranche of Credit Lines of US $85 Million obtained from the World Bank.”.
