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The government has imposed regulatory duty on 312 new customs tariff lines (5-20 percent) covering luxury and non-essential items and enhanced RDs (10 percent to 15 percent) on 295 existing customs tariff lines. Through the Finance Supplementary (Amendment) Bill, 2018, the government has enhanced tax burden on some specific sectors like tobacco, vehicles and mobile phones, etc, and withdrawn some tax incentives given to businesses/individuals through the Finance Act 2018.

The government has withdrawn two major documentation measures which were introduced through Finance Act 2018 i.e. requirement for filing return for acquisition of real estate and registration of new motor vehicles.

According to the Federal Board of Revenue (FBR), the regulatory duties have been an effective tool in maintaining stability of the current account position, competitiveness of the domestic manufacturing sector and promote import substitution. To this end, the RD regime is being broadened to include additional luxury/non-essential items.

It is also the desire of the government to introduce fairness in its fiscal measures, especially with regard to items where both the rich and the poor are treated alike. A glaring example of inequity is the single rate of duty on import of a mobile phone irrespective of its price i.e. a basic unit (costing Rs 3,000-4,000 and a high-end Smartphone (costing Rs100,000) both suffer the same incidence i.e. Rs 250/set. To rectify such inconsistencies, the RD structure on imports of mobile phones is being revised in an equitable manner.

In order to support value-added export sector, customs duty is being reduced on certain industrial inputs so as to decrease their manufacturing costs. The measure would have a revenue impact of Rs 4 billion, sources said. The increase in withholding tax on banking transactions of non-filers may generate Rs 8 billion during 2018-19.

Sources said that the changes in tax rates for individuals would generate an estimated amount of Rs 27-30 billion. The increase in excise duty on vehicles of 1800cc and above may generate additional revenue of Rs 2.5 billion, sources added.