Taxes now reduced for mobile talk time, internet, restaurants among 6 others
For mobile, the hikes brought SD to 23% from 20%. The NBR has now reverted it to 20%. For ISPs, there was no SD, but a 10% tax was imposed. This has also been withdrawn
Highlights:
- Supplementary duty reduced for mobile talk time, internet to 20%
- Supplementary duty on ISPs removed
- VAT on restaurants set at 5% again from 15%
- Changes come outcry over recent tax hikes
- Trade VAT on medicine reverted to 2.4%, down from 3%
The National Board of Revenue (NBR) has decided to reduce the amount of taxes for eight sectors, including those related to medicine, mobile talk-time, internet, and restaurants, just 13 days after it was raised.
The changes came amid much outcry following a decision to increase taxes on around 90 products and services.
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The increased VAT (value-added tax) has not been fully withdrawn for non-AC hotels, sweet shops, and the sale of apparel under proprietary brands.
The VAT rate for these items has been reduced from 15% to 10%, which was previously 7.5% before the hike, according to a press release by the NBR.
This means an effective increase of 2.5% compared to the earlier rate.
For restaurants, the VAT was brought back to 5% from 15%.
The release also said the supplementary duty (SD) hike on mobile talktime, mobile internet and ISPs has been removed.
For mobile, the hikes brought SD to 23% from 20%. The NBR has now reverted it to 20%.
For ISPs, there was no SD, but a 10% tax was imposed. This has also been withdrawn.
In addition, the increased VAT on non-branded clothing has also been withdrawn.
Earlier on 9 January, the government raised VAT and SD on over 90 products and services, including fruits, juices, beverages, tobacco products, restaurants, mobile talk-time and internet.
In a press release, the NBR said, "The withdrawal of the additional VAT on medicine will ensure the continued growth of the pharmaceutical industry and prevent price hikes at the consumer level.
"The complete withdrawal of the increased or newly imposed supplementary duty on mobile phone and ISP services will ensure that consumer expenses in these two sectors do not rise."
The government decision comes as the abrupt hike on numerous goods and services sent shockwaves through the economy, igniting widespread discontent among both consumers and businesses.
