The National Board of Revenue (NBR) has doubled the income tax for companies manufacturing motorcycles, refrigerators, air conditioners and compressors. The agency issued an order in this regard on Wednesday (January 8).
The order signed by NBR Chairman Abdur Rahman Khan said that 20 percent tax should be paid on the income of this industry from the production of refrigerators, motorcycles, air conditioners and compressors. This change will be effective from FY 2025-26.
Besides, the National Board of Revenue (NBR) has increased the advance income tax on imports from 2 percent to 4 percent for these companies, effective from the date of issuance of the order.
According to a Statutory Regulatory Order (SRO) issued in 2021, these companies were supposed to get a reduced 10 percent tax benefit till 2032. But within three and a half years that incentive was withdrawn and the tax rate was doubled.
Reportedly, from 2009 to 2021, manufacturers enjoyed a 5 percent tax rate. Later in 2021 it was increased to 10 percent.
Meanwhile, the decision to increase the tax rate in the new sector comes amid discussions about the pressure on consumers due to the increase in VAT and supplementary duty on about 50 goods and services. Industry experts have expressed concern over the matter.
Experts fear that the rise in taxes, along with the increase in VAT and supplementary duties, will increase consumer costs and create new challenges for manufacturing companies.
