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India

Pakistan likely to hike sales tax on cash transactions

Ministry of Finance sources say the government is likely to ban non-filers from purchasing vehicles or properties and travelling abroad

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Haris Zamir

Business Editor

Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)

Pakistan likely to hike sales tax on cash transactions

A man counts currency notes at his shop in Karachi, Pakistan

AFP/File

Pakistan is likely to hike the general sales tax (GST) from 18% to 20% on purchases made using cash at departmental stores, shopping outlets and grocery marts in the upcoming budget, sources at the Ministry of Finance told Nukta.

Moreover, consumers paying through cash at fuel stations will also likely have to pay a PKR 2 per liter higher levy, they said.

The Pakistan government and the International Monetary Fund (IMF) have been holding virtual discussions on the budget for fiscal year 2025-26. The sources said that the international lender is ready to accept the government's plans to offer relief but wants concrete answers on how the revenue shortfall will be plugged.

The main theme of the upcoming budget will be to reduce cash movement in the economy where currency in circulation has reached more than PKR 9.4 trillion. The IMF has been pressing the government hard to document the economy and raise tax collection.

Moreover, the sources said, the government was likely to ban non-filers from purchasing vehicles and properties and even travelling abroad.

Non-filers would also pay 1.2% on cash withdrawal of PKR 50,000 or above from the present slab of 0.6%, they added.

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