The Federal Board of Revenue (FBR) has recently raised the sales tax rate on food supplies provided by restaurants, bakeries, caterers, and sweetmeats shops to 17%.

The FBR has issued Circular No. 07 of 2022, which explains the changes made to the Sales Tax Act of 1990 by the Finance (Supplementary) Act of 2022.

“Serial No. 64 of the Eighth Schedule of the Sales Tax Act, 1990 has been omitted through the Finance (Supplementary) Act, 2022; now these products shall be liable to tax at 17 percent under the VAT regime,” read the notification.

Previously, restaurants, bakeries, caterers, and sweetmeats shops were required to pay 7.5 percent tax on food, food stuffs, and sweetmeats.