Price Hikes
The federal government’s annual budget for the Fiscal Year 2024-25 has ushered in price hikes for various items, including mobile phones, hybrid cars, cement, property, and cigarettes.
Finance Minister Muhammad Aurangzeb, while presenting the budget in the National Assembly session, emphasized the transition from a government-driven to a market-driven model.
Aurangzeb outlined several tax adjustments and measures aimed at streamlining taxation and promoting economic efficiency.
For instance, the government proposed increasing the GST rate on branded and expensive textile and leather items from 15% to 18% for TIER-I retailers.
Similarly, mobile phone taxes would be standardized at an 18% rate across different categories to eliminate distortions in the market.
Furthermore, the government announced the imposition of withholding tax on copper, coal, paper, and plastic scrap sectors, citing their disorganized nature and minimal contribution to the national exchequer.
Conversely, exemptions were proposed for iron and steel scrap to address issues related to fake invoices and sales tax adjustments.
In a move to align advance tax on vehicle purchases with market realities, the government suggested levying taxes based on the price of the car rather than its engine capacity.
Additionally, strict penalties were recommended for retailers selling cigarettes without tax stamps, including shop sealing.
Other notable proposals included the imposition of federal excise duty (FED) on acetate tow used in cigarette filter production, an increase in FED on cement from Rs2 to Rs3 per kg, and the introduction of a 5% FED on new residential and commercial plots to curb speculation in the real estate sector.
Overall, these budgetary measures aim to enhance revenue collection, promote market efficiency, and address challenges in various sectors while fostering economic stability and growth.
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