According to a report in Business Recorder, sources familiar with the matter have revealed that a proposal to increase the sales tax rate from 18% to 19% was discussed between the Federal Board of Revenue (FBR) and top government decision makers, but this proposal has been rejected once again.

Prime Minister Shehbaz Sharif reportedly declined the suggestion to raise the standard sales tax rate.

The FBR had proposed a 1% increase in the sales tax, projecting that it would generate an additional Rs40-50 billion in revenue for the 2024-25 fiscal year.

State Bank of Pakistan cuts key rate to boost economy

Pakistan’s budget will aim to set stage for IMF bailout

FBR imposes sales tax on locally manufactured cars

However, the Prime Minister has decided against implementing this increase, citing concerns over the potential inflationary impact it could have on the general public.

As a result, the sales tax rate will remain at 18% for the next fiscal year, rather than being raised to 19% as the FBR had proposed.