Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Tuesday wrapped up discussions on the Federal Budget 2024-25 in the National Assembly, maintaining higher tax rates on the salaried group, and announcing an honoraria amounting to 3-month basic pay for the staff and officers of the National Assembly and Senate.
“Budget 2024-25 is based upon a homegrown reform plan under which the government wants to pull the country out of the current economic situation and for this economic reforms are needed,” said Aurangzeb as he began the discussion.
He said the government aims to increase the tax-to-GDP ratio to 13%, pursue the privatisation programme, and implement SOE and energy sector reforms.
The finance minister said the government intends to prioritise the private sector, correct the incentives and shift from a government-led to market-driven economy.
“On the income tax front, before blocking mobile SIMs and banning international travel for non-filers, they will be provided an opportunity of a personal hearing.
“Under Section 116, an explanation will be included in the declaration of foreign assets and assets of spouse, in case of spouse being dependent on the taxpayer.
Fear comes alive: all salaried persons earning over Rs50k a month to bear higher taxation in FY25
He said stationary items will continue to be exempted to sales tax – contrary to the earlier announcement when GST was enhanced on this head.
Moreover, the current reduced sales tax rate will continue to apply on HEVs (Hybrid Vehicles) mentioned in Schedule 8 and Serial No 73.
“Under EFS 2021, zero rating on local supplies will continue,” he said.
These changes come after the Senate on Monday made 128 recommendations to the National Assembly for legal changes and amendments in the Finance Bill, 2024, including the restoration of certain exemptions and reduced tax rates on essential commodities, goods, and services.
The Senate sent the proposals to the National Assembly on the recommendation of the Standing Committee on Finance. The Standing Committee on Finance finalised the recommendations after a daylong session of the committee held at the Parliament House.
On Tuesday, the finance minister said that under the directives of Prime Minister Shehbaz Sharif, the government has tried to protect “as much as possible” the agriculture, health, education and renewable energy sectors.
He said retailers should be part of the tax net for which strict measures need to be taken.
“For non-filers, we have decided to heavily increase tax rates under Section 236G and Section 236H, which will be implemented from July 1, 2024 on all sectors,” he said.
“Time has come to take strict action against retailers who do not participate in the FBR’s Tajir Dost scheme.”
Aurangzeb also lauded the role of armed forces and said national security remains the top priority of the government.
“Through the Special Investment Facilitation Council (SIFC), we have witnessed announcements from friendly countries especially Saudi Arabia and the UAE. We are optimistic on hearing good news in the coming days,” he said.
On the International Monetary Fund (IMF), the finance minister said the government intends to make the upcoming programme the last bailout of the country.
While concluding his address, Aurangzeb announced an honoraria amounting to 3-month basic pay for the staff and officers of the National Assembly and Senate.