Zero-rated tax on 152 imports goes

Zero-rated tax benefit on 152 items, mostly essentials like rice, wheat, onions and edible oils, goes as the new budget takes effect on July 1 with some major changes in fiscal measures.

Importers of the goods would be required to pay 2.0-percent Advance Income Tax (AIT) from the upcoming fiscal year at the import stage.

However, the AIT is adjustable with the actual payable taxes of the importers and traders at the time of submission of tax returns.

The measure has been incorporated into the Finance Ordinance 2025 promulgated on June 2, 2025 to ratify the new budget.

National Board of Revenue (NBR) officials say a Statutory Regulatory Order (SRO), dated May 26, 2025, has been issued  to this effect and it goes down in the ordinance.

However, industry-insiders fear a hike in prices of the essential goods with the newly imposed AIT as most traders of those essentials avoid submission of tax returns and hence won't get the reimbursement.

They will pass on the taxes to consumers without coming onto tax net, they add.

A senior tax official, however, says the measure would rather help the government to hook those traders onto tax net to seek rebate or adjust the paid taxes at import stage.

"A number of traders of essential items are not under the tax net and a negligible portion of them submit tax returns," says one revenue official.

The official says AIT is not an indirect tax as the paid taxes are adjustable to the actual payable taxes.

Importers of rice and wheat are mainly traders or manufacturers who are bound to submit tax returns and have taxable income. Taxmen eye a big chunk of revenue to come from the newly imposed AIT for the upcoming fiscal year. 

Other products to come under AIT include aircraft engine, haemodialyser (Artificial Kidney) double-decker bus, aeroplane, haemodialysis machine, baby incubator, baby warmer and capital machinery.

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