KARACHI: The Federal Board of Revenue (FBR), the revenue division of the government of Pakistan, has announced a one percent increase in the sales tax (further tax) on unregistered persons via the latest amendments in the Finance Bill 2023. The new rate of further tax will be 4 percent, effective from July 1, 2023.

The move is aimed at discouraging supplies to unregistered retailers and distributors, and encouraging documentation and compliance with the sales tax net. Those who intend to avoid the sales tax net will have to pay an additional 4 percent tax on their supplies.

The FBR has also removed the requirement for Tier-1 retailers to have shop areas under the Finance Bill 2023. This will facilitate the integration of small and medium-sized retailers with the FBR’s online system.

Moreover, the FBR has imposed a 5 percent sales tax on DAP fertilizers under the revised tax targets for the fiscal year 2023-24. However, no refund of excess input tax will be allowed on this item under the amended Finance Bill 2023.

The FBR has claimed that these measures will help achieve the revenue collection target of Rs. 8.4 trillion for the next fiscal year.