Prime Minister Shehbaz Sharif has turned down a proposal from the Federal Board of Revenue (FBR) to implement an 18% “Carbon Tax” on petroleum products. Additionally, he rejected the FBR’s suggestion to raise the standard sales tax rate from 18% to 19%.
The FBR had proposed a one percent increase in the sales tax rate to generate additional revenue of Rs 40-50 billion in the fiscal year 2024-25. However, the prime minister dismissed the proposal due to concerns about its immediate impact on public inflation.
Instead, the PM has instructed the tax body to enhance enforcement and administrative measures and develop alternative proposals targeting untaxed or under-taxed sectors of the economy. He also directed the FBR to propose increased taxes on non-essential and luxury items.
