Federal Minister for Finance, Muhammad Aurangzeb, presented the budget for the fiscal year 2024-25, amounting to Rs18.877 trillion, at the National Assembly on Wednesday evening. This marks a significant 30% increase over the previous fiscal year.
Overview of the Budget
The budget aims for a 3.6% GDP growth and sets an ambitious Rs13 trillion tax collection target, focusing on raising taxes for salaried classes and eliminating tax exemptions. Several items, including mobile phones, hybrid cars, cement, property, and cigarettes, have seen price hikes, while solar panels have become more affordable.
Main Features of the Budget
- Total Expenditure: Estimated at Rs18.9 trillion
- Tax Revenue Target: Rs13 trillion for FBR; Non-tax revenue target of Rs3.5 trillion
- Privatisation: Aims to secure Rs30 billion
- Debt Servicing: Estimated at Rs9.8 trillion
- Petroleum Levy: Increased on various fuels
- GDP Growth Target: 3.6% for 2024/25
- Budget Deficit: Projected at 6.9% of GDP
Salary and Pension Increases
- Government Employees: 25% increase for grades 1-16, 22% for grades 17-22
- Pensions: Increased by 15%
Sector-specific Measures
- Solar Panels: Imports of raw materials zero-rated
- BISP: Raised by 27% to Rs592 billion
- Real Estate Sector: Recommends 5% FED on new plots to stabilize the sector
- Federal Excise Duties: Proposed on acetate tow, sugar manufacturers, and withholding tax on specific materials
Reform and Future Strategies
In his budget speech, the finance minister outlined a three-pronged strategy to reform the pension scheme, aligning with international best practices and transitioning to a market-driven model. He emphasized the need for a broad taxation base and a shift towards investment and savings-based economic progress.
Climate Change and Tax Policy
Minister Aurangzeb reiterated the government’s commitment to climate change resilience measures and expanding the tax net to include more traders, with over 40,000 already brought under taxation.
The federal budget for 2024-25 sets ambitious targets for revenue collection, economic growth, and sectoral reforms. It aims to reduce the budget deficit and foster a more sustainable economic framework. The budget has received mixed reactions, with opposition members voicing concerns during the budget speech.
The finance minister’s proposals reflect a comprehensive approach to navigating economic challenges and fostering growth in line with Vision 2030 goals.
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