President Asif Ali Zardari on Sunday approved Finance Bill 2024 on the advice of Prime Minister Shehbaz Sharif.
According to a press release from the President’s Secretariat Press Wing, the Finance Bill will take effect on July 1, 2024.
Govt passes tax-laden budget ahead of talks on fresh IMF loan
On June 28, the National Assembly passed the Finance Bill, 2024 with certain amendments, adopting the financial proposals for the fiscal year beginning on July 01, 2024.
The proposed amendments in the Finance Bill 2024 are related to the non-filers, wealth statements, foreign assets, and withholding tax-related provisions.
The government on the recommendation of the Senate Finance Committee decided to give a chance to non-filers to file tax returns before going abroad. Earlier, the FBR had proposed in the bill that non-filers shall not be allowed to go abroad.
Likely amendments in finance bill: Govt becomes flexible about non-filers
The proposed amendment to the Finance Bill has added an explanation, “For the removal of doubt it is clarified that reference against order of the Commissioner (Appeals), received after the date of commencement of the Tax Laws(Amendment) Act, 2024, where the value of the assessment or, as the case may be, refund of the tax exceeds twenty million rupees, shall lie before the High Court notwithstanding the proceedings pending before the date of commencement of the said Act.”
Pakistan’s parliament on Friday passed the government’s tax-heavy finance bill for the coming fiscal year ahead of more talks on a new bailout with the International Monetary Fund (IMF) as it seeks to avert a debt default for an economy growing at the slowest pace in South Asia.
The government presented the tax-loaded budget two weeks ago, drawing sharp criticism from the opposition parties and other business entities that expressed concern over rising government expenditures and little fiscal room for economic growth.
Finance Minister Muhammad Aurangzeb moved the finance bill in parliament, which was endorsed by the ruling alliance led by Prime Minster Shehbaz Sharif. Pakistan Muslim League-Nawaz (PML-N), the party in command at the centre, saw its main coalition partner, the Pakistan Peoples Party, disagree with some of the budgetary measures before announcing its support earlier this week.
Tax memorandum on changes in Finance Bill 2024
Policymakers have set a challenging tax revenue target of Rs13 trillion ($46.66 billion) for the year starting July 1, up about 40% from the current year, in the national budget presented on June 12.
The budget is an important step towards taking onboard the IMF, which is engaged with Pakistan for a possible loan programme of $6 billion to $8 billion.
The rise in the tax target is made up of a 48% increase in direct taxes and a 35% hike in indirect taxes over revised estimates for the current year.
Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64%.
The tax would increase to 18% on textile and leather products as well as mobile phones besides a hike in the tax on capital gains from real estate. Workers will also get hit with more direct tax on income.
Opposition parties, mainly parliamentarians backed by the jailed former Prime Minister Imran Khan, rejected the budget, saying it will be highly inflationary.