Within two weeks of raising Value Added Tax (VAT) and supplementary duties, the National Board of Revenue (NBR) has reduced VAT and supplementary tax on 10 products and services. This includes mobile phone services, restaurants, medicines, branded clothing, sweets, non-AC hotels, workshops, and others. The NBR issued four orders related to this on Wednesday, assuring that the prices of these goods and services will not increase.

Earlier, on January 9, VAT and duties had been raised on over a hundred products and services, following IMF guidelines to meet the targets for loan-related tax increases. However, the sudden hike in taxes during a period of high inflation faced criticism, and various organizations held protests demanding a rollback.

For medicines, VAT was previously raised by 2.4% to 3% at the local business level, but this has now been withdrawn, meaning drug prices will not rise. In the case of mobile services, supplementary duties on sim cards and phone services (such as talk time and internet) were increased from 20% to 23%, but the rate has now been reduced back to its previous level. Similarly, the 10% supplementary duty on internet service providers (ISPs) introduced on January 9 has been removed.

For restaurants, the VAT on food bills was increased from 5% to 15%, but this additional VAT has now been removed, restoring the previous 5% rate. Non-AC hotels saw VAT reduced from 15% to 10%, though before January 9, it was 7.5%, meaning VAT has increased by 2.5%.

For clothing, VAT on non-branded clothes remains at 7.5%, while for branded clothing, VAT had been doubled to 15% on January 9 but has now been reduced by 5% to 10%. As a result, VAT on branded clothing has increased by 2.5%. The VAT on sweets, which had also been raised to 15% on January 9, has now been cut to 10%, reflecting a 2.5% increase in VAT. Meanwhile, the VAT on motor vehicle garages and workshops remains unchanged at 10%.