• Buying petrol with cash may cost an extra Rs2-3 per litre
• All fuel stations may be legally required to offer digital payment modes
• Manufacturers, importers may charge extra 2pc GST on cash sales
• Emphasis will be on low-cost digital options instead of costlier POS systems
• Minor tax rate cut expected for salaried class

ISLAMABAD: As part of its strategic direction to declare ‘war on cash’, the federal government is likely to introduce differential tax and transaction rates for cash and digital payments across various sectors, including fuel pricing, in the upcoming budget.

This is going to be the most crucial step among many other things that Finance Minister Muhammad Aurangzeb has been hinting at in recent days and may unveil during his budget speech on June 10.

According to sources, the next year’s budget would also be envisaging lower tax rate on the salaried class — though by a tiny margin of 1 to 1.5 percentage points — under strict directions of the prime minister to give a message that the government is at least beginning to ease burden where tax rates are too high, even if it is unable to reduce them significantly.

Sources also said that policymakers had already been working on the technical and administrative aspects of the move to support the Federal Board of Revenue (FBR), which has failed miserably so far to document retail businesses in a manner that could yield revenue outcomes over the past two decades, despite repeated attempts and models.

The finance minister is believed to have held at least three successive consultative sessions with the FBR, the Ministry........

© Dawn Business