Finance Act, 2024 brings changes to the country’s sales tax structure, impacting various sectors. Here’s a breakdown of the key revisions:
Good News for Gold Industry:
- A significant exemption applies to the import of gold under the entrustment scheme (SRO 760(I)/2013). This reduces sales tax burdens, potentially lowering production costs and boosting exports for the jewelry sector.
Relief for Consumers and Specific Industries:
- Residents of Azad Jammu and Kashmir benefit from a sales tax exemption on electricity, making it more affordable.
- Patients requiring cystagon, cysta drops, and trientine capsules can now import them tax-free (tariff heading 3004.9099).
- The livestock and dairy industries see a cost reduction with the exemption on bovine semen (0511.1000).
Broadened Milk Exemption:
- The initial proposal exempting unnamed milk from sales tax is expanded. Now, milk supplied by corporate dairy farms is also tax-free, offering wider consumer relief.
Refined Iron and Steel Scrap Exemption:
- The proposed wider exemption on iron and steel scrap is narrowed. Only supplies made by manufacturer-cum-exporters of recycled copper under the Export Facilitation Scheme, 2021, are excluded, ensuring targeted benefits for export-oriented sectors.
Policy Reflects Strategic Focus:
- These changes showcase the government’s strategic tax policy approach. The aim is to:
- Stimulate economic activity in key sectors like jewelry and dairy.
- Reduce costs for consumers and businesses.
- Promote export growth through targeted exemptions.
Expected Positive Impact:
- The gold import tax exemption, in particular, is anticipated to significantly benefit the jewelry industry. This could lead to:
- Enhanced competitiveness in international markets.
- Increased contribution to Pakistan’s overall economic growth.
