ISLAMABAD: Finance Minister Muhammad Aurangzeb announced on Tuesday that stationery items will remain exempt from tax. This clarification came as a Senate panel expressed dissatisfaction over levies on essential daily items during the budget discussions.
“The budget for the next fiscal year aims at reducing the fiscal deficit by focusing on measures that enhance government revenues and reduce unnecessary expenditures,” Aurangzeb stated while delivering his budget speech for 2024-25 in the National Assembly.
On June 12, the federal government presented an Rs18.87 trillion budget, setting a challenging tax revenue target of Rs13 trillion for the year starting July 1. This target aims to bolster Pakistan’s negotiations for a new bailout deal with the International Monetary Fund (IMF), seeking a loan of $6 billion to $8 billion to prevent economic default.
Aurangzeb emphasized that the government will continue its “process of simplicity and austerity” in the next fiscal year. A committee headed by Prime Minister Shehbaz Sharif has been established to present recommendations, which may include closing down or merging ministries and devolving responsibilities to the provinces.
The finance minister announced plans to reduce pension expenditures through future pension reforms. Last month, federal ministers considered raising the retirement age to manage the pension burden, applicable across the board if approved. Law Minister Tarar highlighted on May 7 that the government is seeking “breathing space” in financial matters, acknowledging the significant public sector expenditure on salaries, retirement benefits, and pensions.
Aurangzeb noted that the fiscal budget for the next year is based on a home-grown reform program designed to navigate the country out of its economic challenges. The reforms aim to enhance the tax-to-GDP ratio to 13%, implement State-Owned Enterprises (SOE) reforms, promote public-private partnerships, and advance energy sector reforms. He stressed the government’s commitment to this plan and its intention to involve all stakeholders in its implementation.
Appreciating the recommendations submitted by the Senate for inclusion in the next year’s budget, Aurangzeb announced that these suggestions would be considered in the public interest. These recommendations include providing non-filers an opportunity for a personal hearing before measures like SIM blockage and a ban on foreign travel are implemented.
Aurangzeb confirmed that the existing reduced rates for Hybrid-Electric Vehicles would remain intact and assured that under the Export Facilitation Scheme 2021 policy, zero-rating for local suppliers would not be abolished. He also stated that proposals such as exempting charity hospitals from sales tax would be given serious consideration.
From July 1, action will be taken against retailers who fail to register with the FBR Tajir Dost Scheme. Additionally, the finance minister announced honoraria equivalent to three months of basic pay for staff members of various departments, including the National Assembly, Senate, PID, Radio Pakistan, PTV, and APP, who performed duties in the Parliament House during the budget session.
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