Finance Minister Muhammad Aurangzeb Wednesday presented the Federal Budget 2024-25 with a total outley of Rs18.887 trillion in the National Assembly session amid the opposition protest.
The government set ambitious Rs13 trillion tax collection target aiming 3.6 percent GDP growth. The budget deficit is projected at 6.9 percent of GDP. The finance minister said total expenditure estimated to be Rs18.9 trillion.
The total outley of budget Rs18.9 trillion is 30 percent more than the total outley of previous year.
The members of the Sunni Ittehad Council (SIC) encircled the NA speaker's dice and raised slogans against the government budget policy. The budget copies reached Parliament and placed at each member's designated seat.
Earlier, federal cabinet approved the budget for the financial year 2024-25. The cabinet also approved package for farmers, youth, and industries.
PM-ped cabinet huddle also approved the increase of 25 percent in the salaries and pensions of grades 1 to 16 and while 20 percent hike for grade 17 to 22 government officers.
All the development schemes were announced by the Federal Finance Minister in the budget speech. Prime Minister banned the publication of the budget document, and the contents of the speech before the budget speech and directed authorities to take action against persons guilty of of leaking the documents.
The Finance Minister presented the coalition government's inaugural budget before the House, emphasized on administration's achievements amidst economic challenges, and outlined a roadmap for sustainable growth and economic stability.
The Finance Minister acknowledged the coalition leadership's role in steering the economy towards progress despite numerous hurdles. He stressed that Pakistan now stands at a critical juncture with a unique opportunity to embark on a path of economic development that cannot be squandered.
He highlighted that the Pakistani Rupee significantly depreciated by 40 rupees within a year amid the backdrop of Delays in the International Monetary Fund (IMF) program.
The IMF Standby Arrangement has since set the stage for economic recovery, as evidenced by the downward trend in inflation and rising investor confidence across various sectors.
The minister said the government is determined to restructure and privatize State-Owned Enterprises (SOEs). In past year, inflation decreased from a staggering 38 percent to a more manageable level.
He said Prime Minister Shehbaz Sharif is actively monitoring the Federal Board of Revenue's (FBR) reforms, aiming to expand the tax net.
In a decisive move to streamline austerity governance, the Prime Minister has ordered the closure of the Public Works Department (PWD).
Federal Budget 2024-25 key points
Rs5 billion Kissan Package
The minister said Rs5 billion has been allocated for the farmers’ packager and the government has decided to take advantage of the investment of the private sector in this regard.
Energy sector
It is proposed to allocate Rs253 billion for the development projects of the energy sector including Rs65 billion for the installation of the electricity lanes and Rs5 billion for the improvement in of distribution of electricity.
Rs21 has been allocated for the 1200 MW Jamshoro Power Plant. Rs11 billion is allocated for the improvement of the system of NDTC.
Defence Budget
The federal government has allocated Rs2.122 trillion for defense in the budget for the fiscal year 2024-25, reflecting a significant increase in defense spending.
This shows an increase of approximately 14.99% from last year's allocation.
Last year, the government allocated Rs1.804 trillion on defence for the year 2023-24, which was around 13% higher than the revised allocation for the outgoing year.
Govt exempts import tax on Solar panel industry
The coalition government of PMLN, PPP, and other parties exempted import tax on equipment for the promotion of the solar panel industry including raw materials for the manufacture of plant machinery and related equipment, solar panels, inverters, and batteries.
Discount on import tax of seed and feed for fish
The minister said adequate decision has been taken to give discount on import tax of seed and feed for fish and shrimp breeding.
New pension scheme
He said reforms will be brought in the existing pension scheme and with initiatives, the pension expenses will be significantly reduced in the next three decades.
A new pension scheme is being introduced for new government employees and under the new scheme, the deduction will be made from the monthly salary for the pension of the employees.
Salary of new government employees
The minister said the salary of new government employees will be fully funded.
BISP budget increased by 27%
The minister said it is proposed a 27 percent increase in the amount allocated for the Benazir Income Support Program (NISP). BISP fund will be increased to Rs593 billion.
“The present number of eligible persons will be increased from 9.3 million to 10 million,” he said.
FBR Tax Target
Education scholarship programme
He said 10 million more children are to be included in the education scholarship programme.
Income tax exempted in FATA, PATA
It has been decided to extend the income tax exemption given to erstwhile FATA and PATA by one year.
Advance tax on vehicle registration
The minister said advance tax on vehicle registration will be based on price rather than engine capacity.
“It has been decided to impose advance withholding tax on non-filers retailers and wholesalers,” he said.
Uptick in advance, withholding tax non-filers retailers
It is proposed to increase advance and withholding tax for non-filers retailers and wholesalers from 1% to 2.25 percent.
Inflation decreased
He claimed that inflation has come down from 38% to 11.8% due to the government measures and efforts to single digit inflation will continue.
The minister said reforms are being brought into the pension system.
All vacant posts of grade 1 to 16 abolished
“It is proposed to abolish all vacancies in grades I to 16. This initiative is likely to save 45 billion rupees annually,” Finance Minister Muhammad Aurangzeb.
Sales tax increase on branded shoes, clothes
The federal finance minister in his speech announced that the government has imposed an 18 percent sales tax on branded shoes and branded clothes in a bid to increase the GST on textile products.
Govt abolishes sales tax exemptions
The federal unity government has decided to abolish sales tax exemptions and concessional rates and to impose a standard rate of sales tax on various goods.
The 18 percent sales tax will be levied on various categories of mobile phones. It has been decided to impose a levy holding tax on copper, coal, paper, and plastic scrap products.
The minister decided to end tax exemption on the import of luxury vehicles. It has been decided to increase taxes and duties on an imported vehicle worth $50,000.
The government has eliminated import duty on imported glass products. It has been decided to increase the rate of import duties on steel and paper products
FED on cement hiked
The FED on cement is decided to be increased from Rs2 per kg to Rs3 per kg.
Property tax increased
The minister announced to imposition of 5 percent on the purchase of new plots and residential and commercial properties.
Govt increases basic salary from Rs32,000 to Rs37,000
As per the budget speech, it is proposed to increase the minimum monthly salary from 32 to 37 thousand, budget speech. Finance Minister in his speech said due to inflation, salaried class purchasing power has been affected.
The finance minister said despite the financial difficulties, measures are being taken for the relief of government employees.
Tax on cigarettes increased
The federal government has decided to tighten the noose against the sale of fake cigarettes in the country. It has been decided to seal the factories selling fake cigarettes.
The Shehbaz-led cabinet has decided to impose a Rs44.000 tax on the material used in the production of cigarette filters.
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