National Assembly approves Rs18,877 billion Federal Budget 2024-25

The National Assembly on Friday approved the Federal Budget for fiscal year 2024-25 with an outlay of Rs18,877 billion, reported 24NewsHD TV channel.

Earlier, the federal government has decided to increase the levy on petrol and diesel by 10 rupees only to Rs70 per litre from Rs60 shelving its original plan to raise it by Rs20 per litre.

As per the readjustment, the levy on petrol and diesel has been increased from Rs60 to Rs70 per litre.

For kerosene and light diesel oil, a levy of Rs50 per litre has been in place. High octane fuel will now have a levy of Rs70 per litre while E10 gasoline will be subject to a Rs50 per litre levy.

Additionally, a levy of Rs30,000 per metric ton has been imposed on LPG.

In an effort to support local manufacturing, the government has granted sales tax exemptions on the import of parts used for the production of solar panels. This includes exemptions on back sheet film, connectors, corner blocks, polyethylene compound, and plate sheets.

Furthermore, parts of solar inverters and lithium batteries will also enjoy sales tax exemptions.

Speaking in the National Assembly on Friday, Federal Minister for Finance and Revenue Muhammad Aurangzeb said the government is committed to increase the tax to Gross Domestic Product (GDP) ratio to 13 percent, which is currently very low stand at 9.5 %. He said the country has achieved macroeconomic stability and by continuing economic stability this FY 2024-25, “We will lead the country towards sustainable economic growth.”

Meanwhile, participating in discussion on the budget 2024-25, in the National Assembly, he said that there is economic stability in the country at the moment and all the economic indicators including current account, fiscal deficit, inflation and foreign exchange reserve are stable and in control.

He said the government is committed to go for reconstruction and digitisation of Federal Board of Revenue (FBR) to take tax to GDP to 13 percent. He said that there will be no category of non-filer in the tax system and everyone will have to pay tax.

Aurangzaib said that tax evasion will be stopped and the tax net will be increased for retailers and the real estate sector in the country. He said that the current account deficit has decreased, the financial deficit is also under control and the country currently has a foreign reserve of $ 9 billion, which has provided an import cover of 2 months.

He said that inflation has come down from 38 percent to 11 per cent and similarly food inflation is sustained at two per cent now. He said that State Owned Enterprises (SOEs) and energy sector reforms will start and the process of privatisation will be completed in the coming three years.

Policymakers have set a challenging tax revenue target of Rs13 trillion rupees for the fiscal year starting July 1, up about 40 per cent from the current year, in the national budget presented on July 12 that looked to strengthen the case for a new rescue deal with the IMF.

Pakistan is in talks with the IMF for a loan of $6 billion to $8bn.

The rise in the tax target is made up of a 48pc increase in direct taxes and a 35pc hike in indirect taxes over revised estimates of the current year. Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64pc.

The tax would increase to 18pc on textile and leather products as well as mobile phones besides a hike in the tax on capital gains from real estate.

Workers will also get hit with more direct tax on income.

The government has projected a sharp drop in its fiscal deficit for the new financial year to 5.9pc of GDP, from an upwardly revised estimate of 7.4pc for the current year.

The central bank has also warned of possible inflationary effects from the budget, saying limited progress in structural reforms to broaden the tax base meant increased revenue must come from hiking taxes.

The upcoming year’s growth target has been set at 3.6pc with inflation projected at 12pc.

PM meets Bilawal in NA

Prime Minister Shehbaz Sharif met PPP Chairman Bilawal Bhutto Zardari during National Assembly session on Frida.

Shehbaz Sharif got up from his seat during the clause-by-clause approval of the Finance Bill and walked to Bilawal’s seat and inquired after his health. The PPP chairman also reciprocated.

Journalists stage walkout

Parliamentary Reporters Association of Pakistan walked out from the press gallery during the National Assembly session, reported 24NewsHD TV channel on Friday.

Journalists were of the view that they were ill-treated on the first day of the budget session.

Later, Federal Information Minister Attaullah Tarar held talks with the journalists and tried to convince them to end their boycott

Reporters Usman Khan and Rozina Ali