Government Considers Dual Fuel Pricing Based on Payment Type

Get ready, Pakistan! The coming budget for the federal government for the fiscal year 2025 – 26 is expected to bring some major modifications that could have an impact on your spending habits, particularly in relation to the fuel cost and purchasing new vehicles. The government wants to take a major step towards a “cashless economy,” which means your transactions will be made online via QR codes, debit/credit cards, or online banking apps.

Cash vs. Card: Navigating Fuel Price Differences

Picture this: you pull your vehicle to a gas station and have a choice to pay for the fuel. If you pay with cash, it might cost you a bit more. But you could get a better price if you go digital, using QR codes, credit/debit cards, or mobile apps. That’s right! The government is considering a new tax system that will treat cash and digital payments differently, especially for gas stations (fuel), to make the economy cashless.

Here is the scoop: if you pay digitally, you’ll pay the regular 18% sales tax on fuel. However, if you choose to pay with cash, you could end up paying an extra Rs. 2-3 extra per liter. This isn’t just about pushing people toward digital payments; it’s a clever strategy to improve tax collection and bring more transactions into the government economy. The Federal Board of Revenue (FBR) is putting in a lot of effort to keep track of retail businesses, and this change could really help them understand the market in a better way.

To make this a reality, every gas station in the country will soon be required to provide digital payment options. So get ready to see more QR codes and card readers at your favorite pump!

From Budget to Burden: Small Car Prices Escalate

Prices for fuel are changing, and car buyers must also be ready for unexpected events. If you’re planning to purchase a new car, specifically an affordable and smaller model, here’s some information that may dampen your enthusiasm.

There has been discussion in the past about increasing the tax withholding (WHT) on cars with engines greater than 1,300cc. Now, recent reports indicate that even smaller cars, those with engine sizes up to 850cc, could see a rise in sales tax. Currently, these smaller vehicles benefit from a lower sales tax rate of 12.5%. However, under the new proposal, this rate could increase to the standard sales tax of 18%.

These proposed changes are part of the government’s plan to modernize the economy, boost tax revenue, and lessen cash dependency. For the final details, be sure to watch the official budget announcement. It’s an exciting time of transformation for Pakistan’s economy!

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