The National Board of Revenue (NBR) has announced that, in addition to increasing the value-added tax (VAT), various measures are being taken to expand the scope of income tax. NBR stated that, in the ongoing process of moving away from the culture of income tax exemption, several provisions related to tax exemptions have been canceled or amended, with more actions in progress.

In a statement on Saturday (January 4), NBR clarified that while VAT, supplementary duties, and excise duties are being increased on certain goods and services, essential products are not included in these hikes. Therefore, there will be no impact on the prices of everyday consumer goods or inflation.

At a meeting on Wednesday, a policy decision was made to increase VAT in various sectors. NBR emphasized that, in response to recent media coverage regarding VAT, income tax, and duties, it is taking steps to increase revenue collection while rationalizing VAT rates. These steps aim to contribute to the implementation of Sustainable Development Goals (SDGs) and help the nation achieve financial independence.

NBR also mentioned that, in the past four months, they have provided tax, VAT, and duty exemptions on eight essential products, including rice, potatoes, onions, sugar, eggs, dates, edible oil, and pesticides, in order to stabilize supply and prices. However, this has led to a significant reduction in revenue collection. Without increasing revenue from sectors other than essential goods, there will be a large budget deficit.

To counter this, NBR plans to take specific measures in the 2024-25 fiscal year to rationalize VAT, supplementary duties, and excise duties, and expand VAT coverage to boost revenue.