Federal Finance Minister Muhammad Aurangzeb introduced the long-awaited federal budget for the fiscal year 2024-25 in the National Assembly today. The proposed budget amounts to approximately Rs18.9 trillion, aiming to tackle various economic challenges while promoting growth and stability.
Tax Revenue Objectives:The Federal Board of Revenue (FBR) has set an ambitious target for tax collection, aiming to reach Rs12,970 billion.
Salaries and Pensions:
Government employees can expect a 10 to 15 percent increase in their salaries and pensions, providing significant relief, particularly to lower-grade employees.
BISP and Social Welfare:
The budget suggests expanding the number of beneficiaries under the Benazir Income Support Programme (BISP) and increasing the stipend amounts, with the aim of supporting the most vulnerable segments of society.
Read more: Budget 2024-25 Significant salary increases anticipated
Defense and Security:
An allocation of Rs2,100 billion has been proposed for the defense sector to ensure national security and support the armed forces.
Financial Deficit and Debt Servicing:
The budget indicates a financial deficit of Rs9.8 trillion. Moreover, Rs9.7 trillion has been earmarked for servicing the interest on existing debt, highlighting the government’s dedication to managing its financial commitments.
Additional Taxes and IMF Requirements:
In order to meet the demands of the International Monetary Fund (IMF), the budget introduces several new taxes. This includes potential price hikes for old imported vehicles, imported mobile phones, and cigarettes.
Cost of Living Adjustments:
The proposed elimination of sales tax exemptions on thousands of goods is expected to raise the prices of imported food items, baby milk, medicines, and stationery.
Agricultural tools, tractors, fertilizers, and seeds may also experience price increases, impacting the agricultural sector.
General Sales Tax (GST) Increase:
A rise in the GST rate from 18% to 19% is proposed, which is projected to generate an additional Rs100 billion in revenue.
Petroleum Development Levy:
The levy on petroleum products is suggested to increase from Rs60 to Rs80 per litre, potentially leading to higher fuel prices nationwide.
While aiming to balance fiscal responsibility with social welfare, the new budget’s introduction of new taxes and reduction of exemptions may result in increased costs for consumers.
As the budget proposals undergo scrutiny in the National Assembly, the government will need to navigate the challenges of meeting IMF conditions while ensuring economic relief for its citizens.
