Five percent excise duty has also been imposed on commission or brokerage charged for the services provided by foreign exchange dealers including moneychangers.
Minister for State for Finance Omer Ayub Khan in his budget speech on Monday, while withdrawing 5 percent customs duty on the import of computer hardware, announced levy of 15 percent general sales tax (GST) on the import and local supply of computer hardware. The withholding tax has also been slashed from 6 to 1 percent on the computer parts.
In a move to tax the rich people, 15 percent excise duty on international air travel has been proposed bringing it at par with the domestic air travel where 15 percent excise duty is applicable. The levy would rationalise the excise tariff, besides bringing a positive effect on the public exchequer. The levy would not be applicable on the Haj fare/ticketing.
Giving relief to the middle and low-middle segment of the society, the 12.5 percent excise duty on the travel by train in air-conditioned and first class sleeper has been abolished.
The government has also made it mandatory for the cable TV operators to pay Rs 25 per connection per month as excise duty. The business of operators has witnessed a substantial growth in the recent years and almost every household is utilising the cable TV service.
The collection shall be made in collaboration with Pakistan Electronic Media Regulatory Authority (Pemra).
Five percent excise duty would also be applicable on the transfer of money including telegraphic transfer, mail transfer and electronic transfer, bill discounting commission, safe deposit locker's fee, safe vaults, credit and debit card issuance processing and renewal.
The levy would also be applicable on the commission and brokerage of foreign exchange dealers, exchange companies and moneychangers. The financial services have grown at an enormous pace during the last couple of years. The levy shall be charged on the gross amount of commission or brokerage charged for the services provided by foreign exchange dealers including moneychangers. Five percent excise duty has also been imposed on the franchise services.
The government has separately specified the telecommunication services liable to excise duty in the Federal Excise Act. However, two new services including vehicles tracking system and burglary alarm services would be liable to 15 percent excise duty.
Presently, cigarettes are chargeable to excise duty on the basis of retail price. To complement the growth in cigarette industry and to enhance excise duty collection without disturbing the present three-tier system for the purposes of levy, retail price of cigarettes is increased by 7 percent.
The rate of excise duty has been enhanced from 3 percent to 5 percent on insurance service.
Excise duty shall be levied on gross premium of services provided by insurance companies, excluding the life insurance.