Islamabad: The Pakistani government is considering a mini-budget that would impose new levies on luxury items such as cars, electronics, and cigarettes to raise at least PKR 50 billion for flood recovery, reported news sources.
Finance Minister Muhammad Aurangzeb chaired discussions on the proposed measures, which aim to bridge the revenue gap caused by the recent devastating floods and the Federal Board of Revenue’s (FBR) underperformance in tax collection. The FBR faced a PKR 40 billion shortfall for the July-August period, expected to rise by the end of September.
Under the proposed plan, imported electronics above certain price thresholds could face a 5% tax, while cigarettes may incur a flat PKR 50 levy per packet. Cars with engines above 1,800cc would also see additional duties, adding to the existing tax burden, which ranges from 30% to 61% of the vehicle’s total price.
The government is also considering levies on goods previously subject to reduced regulatory duties under IMF-guided trade liberalization. However, officials noted that such measures could face resistance in upcoming IMF review talks.
The revenue collected from the proposed flood levy will be allocated entirely to the federal government to support reconstruction and relief efforts in flood-affected areas, rather than being shared with the provinces.
Meanwhile, a meeting of the Prime Minister’s Committee on Flood Damages, chaired by Federal Minister for Planning Ahsan Iqbal, reviewed the preliminary damage assessment. A comprehensive assessment is expected within ten days, with coordination from provincial governments and international organizations.
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