Federal Budget 2024-25: Sales Tax Hike Impact

The federal budget for the fiscal year 2024-25, with an estimated outlay exceeding Rs18 trillion, is set to be presented on June 12. This budget may bring changes to the sales tax rates, affecting the prices of essential items like sugar, ghee, tea, soaps, shampoos, makeup, noodles, jam, jelly, and more. Currently at 18 percent, the government is contemplating raising the sales tax rate by 1 percent to 19 percent. This adjustment could lead to a Rs5 per kilogram increase in sugar prices, providing additional revenue for the government.

The proposed sales tax hike aims to strengthen the country's finances and support negotiations with the International Monetary Fund (IMF) for a new bailout package. The budget, effective from July 1, 2024, is expected to impact consumer goods. If approved, the 1 percent sales tax increase could result in a Rs2 to Rs5 increase in soap prices and a Rs15 to Rs20 surge in shampoo prices per bottle starting July 2024.

The upcoming federal budget for 2024-25 carries the potential for changes in sales tax rates, which may affect the prices of various everyday items. This adjustment is aimed at improving the country's financial situation and could have implications for consumers. Stay informed about these developments to understand how they may impact your daily expenses.