This Budget 2024-25 proposes to impose additional sales tax on various items, which will result in more inflation to the public.
The budget for the next financial year has set a tax target of Rs12,900 billion, a Rs3,440 billion higher than the current target. To meet this increase, the government has proposed to levy additional sales tax on 7,000 items.
According to sources, the government has proposed to levy new taxes and remove sales tax exemption to generate additional revenue of Rs2,000 billion. Under this proposal, sales tax will be increased on sugar, rice, pulses, milk, flour, tea leaves, oil, ghee, baby diapers and other necessities of life.
The sources say that a 6 percent sales tax is proposed to be imposed on petroleum products in the initial stages, which is expected to generate an additional revenue of around Rs600 billion. Apart from this, a proposal to abolish all sales tax exemptions in the Finance Bill for the next financial year is also under consideration.
Likewise, sales tax is likely to be imposed on canned milk in the upcoming budget. This initiative is expected to generate additional income of around Rs550 billion. Also a proposal to increase the sales tax rate from 18 percent to 19 percent is under consideration, which is expected to generate additional revenue of Rs100 billion.
After the increase in sales tax, the prices of various goods will increase.
The price of sugar may increase by Rs.5 per kg; prices of ghee and edible oil are expected to increase by Rs 5 to 7 per kg respectively, and the price of soap may increase by Rs2 to Rs5.
Shampoo may become expensive by Rs15 to Rs20. The prices of toothpaste and toothbrush are expected to increase by Rs5 to Rs7 respectively. The price of beverages may increase by Rs5 to Rs7 per liter.
The increase in sales tax will further increase the rate of inflation, which is already a major problem for the people. The prices of various brands like electronics, makeup, hair dyes, clothes, leather products, spices, tea and coffee, baby breakfast cereals, porridge, jam, jelly, tissue, paper napkins and baby diapers are expected to increase.
A one percent increase in import duties for commercial importers is also proposed, which is estimated at Rs50 billion. The move will also increase the prices of imported goods, which will directly burden consumers.
The government is of the view that the aim of these measures is to stabilize the country’s economy and reduce the fiscal deficit. However, the public will face rising inflation as a result of these measures, which is already a major problem for them.
The public will have to face more difficulties in the budget of the next financial year. Additional sales tax and other taxes will increase the prices of essential commodities, which will also increase the rate of inflation. People have to be aware of the impact of this budget and adjust their financial plans accordingly. The government should take into account the problems of the people and take measures to provide relief to them and help control inflation.
