NBR halves VAT hike on biscuits

The National Board of Revenue (NBR) has halved the amount of value added tax (VAT) it had initially decided to impose on biscuit sales, according to a government notification issued yesterday.

Consumers pay a 5 percent VAT on the popular snack.

In early January, the NBR had decided to impose a 15 percent VAT on biscuits and nearly 100 other items.

The revenue authority yesterday said now it would levy a 7.5 percent VAT instead.

The hike had sparked criticism from various quarters, with concerns that it could fuel inflation, which has remained above 9 percent since March 2023.

On January 22, the NBR revised the VAT and supplementary duty (SD) on nine goods and services, including mobile phone usage, internet services, and medicines.

Agro and food processors had been urging the government to reverse the VAT increase on food products, including biscuits.