Muhammad Ayub Ali :
The National Board of Revenue (NBR) has decided to reduce taxes for eight sectors, including restaurants, medicines, internet service providers (ISPs), sweets, ready-made clothing, non-AC hotels, and motor workshops. These tax measures were originally introduced on 9 January.
The interim government faced widespread criticism from business stakeholders and the general public after increasing value-added tax (VAT) and supplementary duty (SD) on more than 90 products.
Although the increased VAT has not been fully withdrawn for non-AC hotels, sweet shops, and the sale of apparel under proprietary brands, the NBR has reduced the VAT rate for these items from 15 percent to 10 percent.
Prior to the hike, the VAT was 7.5 percent, meaning an effective increase of 2.5 per cent compared to the earlier rate.
For restaurants, the VAT has been reduced from 15 percent back to 5 percent.
Additionally, the supplementary duty increase on mobile talk time, mobile internet, and ISPs has been reversed.
The recent hikes had raised SD on mobile services from 20 percent to 23 percent, but it has now been reverted to 20 percent. In the case of ISPs, a 10 percent tax was newly imposed but has now been withdrawn.
Furthermore, the increased VAT on non-branded clothing has also been repealed.
Earlier, on 9 January, the government raised VAT and SD on over 90 products and services, including fruits, juices, beverages, tobacco products, restaurants, and mobile services.
