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In a new law approved by the president on Monday, fixed sales taxes for traders on power bills have once again been implemented by the government after recent taxes on merchants were repealed. These taxes range from 5 to 7.5 percent.

According to the law, merchants and traders whose power bills total more than Rs 20,000 must pay 7.5 percent in sales tax, compared to retailers and traders whose bills total less than Rs 20,000. In its recently released "mini-budget," the government set a tax collection goal of Rs. 27 billion through the sales tax on merchants.

It is important to note that traders recently rejected the 3000–6000 rupees in additional taxes and pushed the government to eliminate the levies. Various trade associations protested across the nation, especially in Karachi, Pakistan"s commercial centre. They warned the government of capitulation and claimed that the levy of levies was unfair and unlawful.

Federal Minister of Finance and Revenue, Miftah Ismail, had stated that the government had made a serious error when enforcing the taxes because many small business owners and retailers were adversely affected. Miftah was able to placate the irate demonstrators and remove the levies that had been levied through electricity bills following multiple talks with various trade organisations.

However, with the support of Pakistan"s president, Dr. Arif Alvi, the government has implemented a new sales tax through Tax Laws (Second Amendment) Ordinance, 2022. The administration wants to pass the decree in order to obtain the $1.17 billion tranche from the International Monetary Fund (IMF), which would allow the World Bank and the Asian Development Bank to continue providing the nation with external finance (ADB). The IMF Executive Board will decide definitively on the programme at its meeting on August 29.