The lower house of the Pakistani Parliament (National Assembly) has on Friday approved the federal budget for the fiscal year 2024-25 by majority vote.
In the session chaired by Speaker Ayaz Sadiq, the National Assembly approved the federal budget of 18 thousand 887 billion rupees.
The Prime Minister of Pakistan Shehbaz Sharif, Chairman People’s Party Bilawal Bhutto and others also participated in the budget session of the National Assembly, while the opposition said on this occasion that this is a budget prepared by the IMF, which has nothing for the people.
The House has approved the Finance Bill 2024 with certain amendments to implement the Federal Government’s financial proposals for the year commencing July 1, 2024.
Responding to the opposition’s points on Finance Bill 2024, Finance Minister Muhammad Aurangzeb said that the economy has achieved stability.
He expressed the determination of the government to further advance the process of economic stabilization with the aim of driving the economy towards development.
Key features of the budget include a tax revenue target of 13 trillion rupees ($46.66 billion) for the new fiscal year, a 40 percent increase over the current year.
The new taxes include a 48 percent increase in direct taxes and a 35 percent increase in indirect taxes. Non-tax revenue including petroleum levies is expected to increase by 64%.
Capital gains from textiles, leather, mobile phones and real estate are among the sectors most affected by the new revenue measures in the new budget. Meanwhile, the salaried class will pay more direct taxes on their income.
The fiscal deficit target for the new fiscal year has been set at 5.9 percent of GDP. The budget predicts economic growth at 3.6 percent while inflation is expected to touch 12 percent.
In the National Assembly, the provision to increase the rate of taxes on tickets for international air travel was approved.
From July 1, a tax of Rs 12,500 will be applicable on economy and economy plus tickets for international travel.
From July 1, tax on business class and club class tickets for USA and Canada has been approved up to one lakh rupees.
For travel to the Middle East and Africa, a tax of Rs 150,000 will have to be paid on business, first and club class, while a tax of Rs 2,10,000 will be applicable on business, first and club class for air travel to Europe.
Air travel to Far East, Australia and New Zealand will have to pay a tax of Rs 2 lakh 10 thousand on business, first and club class.
The National Assembly passed the government’s tax-laden fiscal bill for the coming fiscal year ahead of further talks on a new International Monetary Fund (IMF) bailout.
Federal Finance Minister Senator Muhammad Aurangzeb presented the budget proposals for the next fiscal year before the National Assembly two weeks ago.
The budget proposals were heavily criticized by the opposition parties in the National Assembly, especially the PTI, as well as the government ally Pakistan People’s Party.
Opposition parties, particularly MPs backed by then-imprisoned former prime minister Imran Khan, rejected the budget, saying it would lead to hyperinflation.
On Tuesday, the People’s Party decided to vote in favor of the Finance Bill despite some reservations after an initial boycott of the budget debate.
Giving a press briefing after the party meeting, PPP leader Naveed Qamar said that it was decided in the meeting that if the party did not vote for the budget, it would be equivalent to abolishing the government and paving the way for instability in the country. .
Apart from the People’s Party, members of the National Assembly of another ruling coalition partner Muttahida Qaumi Movement Pakistan (MQMP) also expressed their concern over the government’s move to tax the salaried and middle class people and said that The budget will increase inflation in the country.
In the national budget to be presented on July 12, policymakers have set a challenging tax revenue target of 13 trillion rupees for the fiscal year starting July 1, nearly 40 percent higher than the current year.
Pakistan is negotiating with the IMF for a loan of six to eight billion dollars.
The increase in the tax target is made up of a 48 percent increase in direct taxes and a 35 percent increase in indirect taxes over the current year’s revised estimates. Non-tax revenue, including petroleum levies, is witnessing a 64 percent increase.
This section contains related reference points (Related Nodes field).
Tax on textile and leather products as well as mobile phones will increase to 18 percent, besides tax on capital gains from real estate.
Workers will also face direct tax on income.
The government has projected a narrowing of its fiscal deficit to 5.9 percent of GDP for the new fiscal year, up from a revised estimate of 7.4 percent for the current year.
The central bank has also warned of potential inflationary effects from the budget, saying limited progress on structural reforms to broaden the tax base means that revenue growth must come from tax increases.
The growth target for next year has been set at 3.6 percent while the inflation rate is expected to remain at 12 percent.
Earlier, Finance Minister Senator Muhammad Aurangzeb proposed the increase in levy on petroleum products for approval in the National Assembly.
In the session presided over by Speaker National Assembly Sardar Ayaz Sadiq, amendments in the Finance Bill were presented in the House, which included the amendment to increase the levy imposed on petroleum products.
On the other hand, the opposition also submitted amendments against the Finance Bill and opposed the amendments submitted by the Finance Minister.
The federal government has announced to increase the petroleum levy from the current 60 rupees per liter to 80 rupees per liter in the federal budget of fiscal year 2025, but the government will periodically impose a petroleum levy of 20 rupees per liter.
#National #Assembly #approved #federal #budget #thousand #billion #rupees
