Islamabad: Finance Minister Muhammad Aurangzeb presented the first federal budget in the National Assembly. Opposition MPs, who have been absent from the past few budgets, raised loud slogans.
The cry of “Go, Nawaz, go” echoed through the whole process, apparently not strengthened by Aurangzeb’s words.
This year’s budget, like last year’s, is believed to be designed to meet the International Monetary Fund’s (IMF) “bigger and longer” demands for another bailout, now.
The finance minister thanked Prime Minister Shehbaz Sharif, his brother and PML-N leader Nawaz Sharif and other leaders of the coalition government for supporting them in preparing the budget.
He urged Pakistan to seize new opportunities to revive its economy.
I request everyone not to take advantage of this opportunity, he said.
The finance minister appreciated the government’s efforts to overcome economic challenges and promised to accelerate development under the leadership of Prime Minister Shehbaz.
“Before presenting the budget, I would like to highlight our journey so far,” the minister said.
Aurangzeb acknowledged the challenges faced by Pakistan’s economy, which was struggling with dwindling foreign reserves, a 40 percent devaluation of the rupee, stagnant economic growth and inflation that put citizens below the poverty line.
He praised the government for providing a nine-month HPG program in June 2023, which helped Pakistan avoid economic recession.
“The previous IMF program has ended and the new agreement is important to avoid a deal. I commend the government of Shehbaz Sharif for the effort to provide this program,” he said.
Aurangzeb credited the efforts of the prime minister and his team for the dramatic improvement in economic performance.
The minister spoke about the significant changes in Pakistan’s economy with the strengthening of foreign exchange reserves and the strong interest of international investors to invest in the country.
“Pakistan’s foreign exchange reserves have strengthened and international investors are now looking for opportunities to invest in our economy,” said Aurangzeb.
He welcomed Bank Negara’s decision to cut interest rates, citing a visible effort to fight inflation. “State Bank of India’s interest rate cut is an important step and efforts to curb inflation are evident. Shehbaz Sharif and his team deserve congratulations for their laudable efforts to transform the economy,” he said.
“This achievement is not unusual. As a result of this, the country has come out of difficult times.
The minister said patience and collective efforts are needed to achieve sustainable economic growth and warned that growth cannot be accelerated overnight.
A home remedy plan requires patience and a lot of hard work. We must work together with social organizations to achieve our economic goals, “Aurangzeb reiterated the importance of cooperation and sustained efforts.
Before that, the session started with the recitation of Al-Quran and the State Assembly.
The session was attended by Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar.
The session started with a delay of almost two hours after PPP gave reservations about the development division and PML-N managed to accommodate them.
PPP lawmakers attended the session to complete the required quorum, albeit without party chairman Bilawal Bhutto Zardari. After reciting the Qur’an and Sena Nagara, the speech is expected to begin.
Earlier, PPP leader Khurshid Shah told reporters that the party had reservations about the Public Sector Development Program (PSDP) budget and the PPP should be sure about the budget.
“It has been decided together to decide PSDP for four provinces,” he said.
“We are in the same boat. If something goes wrong, it is not only for the PML-N but also for our allies,” the PPP leader said, adding that his decision not to attend the speech was to protect his party.
Key decisions include:
Eliminate sales tax exemptions and preferential rates
Apply the standard sales tax rate to various items
Eliminate import tax exemptions for luxury vehicles
Increased taxes and fees on imported vehicles worth $50,000
Eliminate import duties on glass products
Increase import tariffs on steel and paper products
Strong penalties for selling fake cigarettes, including closing shops
Paid $44,000 for kilotax on filter material
Increase FED in cement from 2 to 3 kg
Introducing 5% FED on properties and new properties
Increase GST on branded clothing and footwear to 18%
Govt raises minimum basic salary to Rs37,000
Islamabad: The federal government led by Prime Minister Shehbaz Sharif on Wednesday announced an increase in the minimum wage from Rs 32,000 to Rs 37,000.
The amendment is part of a broader strategy to improve the financial stability of government employees in the coming fiscal year.
In an important meeting chaired by Prime Minister Shehbaz Sharif, the Cabinet approved the proposed budget for the financial year 2024-25.
At the meeting, federal ministers gave the green light to the proposed budget for the next fiscal year, allowing for a 25 percent pay rise for civil servants.
Students in grades 1-16 will see a 25% pay increase and employees in grades 17-22 will see a 22% increase.
Cabinet okays massive hike in salaries for govt employees
Islamabad: The Federal Cabinet has given the green light to the proposed budget for the next financial year, allowing a 25 percent hike in the salaries of government employees.
In an important meeting chaired by Prime Minister Shehbaz Sharif, the ministers approved the proposed budget for the financial year 2024-25.
The budget also includes an integrated package aimed at supporting farmers, youth and industry.
Sources indicate that Federal Finance Minister Muhammad Aurangzeb will elaborate on this initiative in his budget speech to be presented in the National Assembly soon.
The decision came as a relief to civil servants who were offered better salaries as the cost of living rose. The 25 percent salary increase is expected to improve the morale of civil servants and increase the efficiency of public administration.
The package for farmers is expected to include subsidies and support mechanisms to increase agricultural productivity and ensure food security. Similarly, the youth package is expected to include programs designed to promote entrepreneurship, skills development and employment opportunities.
The industry will also receive attention through incentives aimed at increasing industrial growth, innovation and competitiveness in the global market. These measures are part of a wider strategy to strengthen the economy and create a safer and more resilient industrial sector.
Prime Minister Shehbaz Sharif said the government has decided to implement policies that support economic stability and growth. While maintaining fiscal discipline, he said the budget reflects a balanced approach by meeting the needs of various levels of society.
Pakistan to accelerate CPEC phase 2 in next fiscal year
Islamabad: In a major political shift, Pakistan has decided to fast-track the second phase of the China-Pakistan Economic Corridor (CPEC) in the coming fiscal year.
The government aims to promote cooperation with China in the industrial and agricultural sectors, along with the promotion of social and economic development.
According to the budget document, priority will be given to complete mining and mineral projects in the next financial year. Four of the nine Special Economic Zones (SEZs) are expected to be completed. These zones include Rashakai, Allama Iqbal, Dhabeji and Bostan Special Economic Zone. Several industrial units are expected to start production soon.
In order to increase exports, the government plans to increase agricultural production by introducing modern technology in this sector. Increasing cooperation in science and technology between Pakistan and China is on the agenda.
In addition, 27 key projects aimed at poverty alleviation have been identified. Of these, 17 priority projects will be completed next year, and MoUs for 10 more projects will be signed during that time.
Ensuring the safety of the CPEC project is a top priority and advanced technology will play an important role. Poverty reduction projects include health, education, agriculture, vocational training and water supply initiatives.
In addition, oil and gas as well as the energy sector have been declared as priority areas of CPEC, indicating a comprehensive approach to use this important economic corridor for the development of Pakistan.
This strategic acceleration of the second phase of CPEC demonstrates Pakistan’s commitment to forge economic ties with China and advance its development agenda through this pioneering initiative.
Govt imposes additional sales tax on mobile phones
Islamabad: The federal government has announced changes to the existing tax structure by introducing major changes in various sectors.
In this overhaul, it has been decided to Levy 18 percent sales tax on cell phones across various categories, a move that will have far-reaching implications for consumers and the telecommunications industry.
In its latest budget proposal, the finance ministry has outlined several key decisions, including the release of some sales tax exemptions and the introduction of standardized tax rates on various items.
An important change is the taxation of items such as copper, coal, paper and plastic waste. In addition, the government has decided to increase tax incentives for the import of expensive vehicles, and increase taxes and duties on imported vehicles worth fifty thousand dollars or more.
In addition, the new policy to issue import taxes on glass products aimed at supporting the local construction industry. Instead, import duties on steel and paper products will rise, indicating the government’s intention to protect domestic producers from international competition.
In his speech, Finance Minister Muhammad Ishaq Dar said these measures are part of a broader strategy to stabilize the economy and ensure a fairer tax system. “Our goal is to create a fairer tax environment where every industry contributes its fair share to the national treasury. These changes are essential for financial health and long-term economic stability.”
Exports, Industrial Growth Main Focus
According to sources, Islamabad: Alleviation of human suffering, agricultural reform, development of Information Technology (IT), export promotion and industrial growth and business development will focus on the document.
The Government is committed to delivering a pro-people, pro-business and pro-progressive Federal Budget for the 2024-25 financial year. Will implement policies aimed at fiscal consolidation to contain the budget deficit.
People-friendly policies for revenue mobilization, economic stabilization and development measures, reduction of non-development expenditure, job creation and socio-economic prosperity will be outlined in the budget.
It will also focus on social sector development, in addition to introducing reforms to improve governance and increase private sector investment.
On the revenue side, the government will introduce measures to improve the tax collection system, expand the tax base and provide relief to taxpayers.
Given the strong revenue growth in this fiscal year (2023-24), the government will exceed the revenue collection target of $1,200 billion for the fiscal year 2024-25.
Sources said preparations for the federal budget announcement were on schedule.
According to sources, the budget was prepared in close coordination between all departments and ministries involved in budget-related work, including the presentation of the budget in parliament and the launch of the Economic Survey.
The federal government will provide a budget of more than $18.9 trillion.
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.
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 increased
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.
BISB 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.
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.
Luxury vehicle import tax exemptions scrapped
In a move aimed at raising government revenue and cracking down on illegal activities, the Pakistani government has announced a series of tax changes. These changes will impact a variety of goods, from everyday essentials to luxury items.
In a decisive move, sales tax exemptions and concessional rates are set to be abolished, paving the way for the imposition of standard sales tax rates on numerous goods.
Luxury vehicles
One of the major changes includes the elimination of import tax exemptions for luxury vehicles, particularly those worth $50,000 or more, which will now face increased taxes and duties. Additionally, the government has decided to abolish import duty on glass products while increasing import duties on steel and paper products.
Fake cigarettes face the heat
The government is taking a tough stance against counterfeit cigarettes. Shops selling these will be shut down, and those involved could face stricter penalties. Additionally, a hefty tax of Rs 44,000 per kilogram has been imposed on materials used in cigarette filters, a common component in smuggled cigarettes. This will make it more expensive to produce fakes, making them less profitable for smugglers.
FED on Construction Sector
The Federal Excise Duty (FED) on cement has been raised from Rs 2 per kg to Rs 3 per kg, reflecting the government’s effort to increase revenue from the construction sector. Similarly, a new 5% FED will be imposed on new plots and residential and commercial properties.
GST on textile and leather industries
Retailers in the textile and leather industries will also see changes, with the GST on branded clothes and shoes increased to 18%. These measures are part of a broader strategy to enhance tax collection and ensure fair market practices.
Import duty on glass products
The import duty on glass products has been removed, while duties on steel and paper products have been raised. In the construction sector, the Federal Excise Duty (FED) on cement has been increased from Rs 2 per kilogram to Rs 3 per kilogram. Additionally, a 5% FED has been imposed on new residential and commercial properties.
The government’s commitment to these reforms underscores its focus on addressing economic challenges and ensuring sustainable growth. These tax adjustments are expected to have widespread implications across various sectors, influencing consumer behavior and market dynamics.
Govt Allocates Rs2.122 Trillion For Defense
Islamabad: The federal government has allocated $2.122 trillion for defense in the budget for the fiscal year 2024-25, indicating a significant increase in defense expenditure.
This represents an increase of approximately 14.99% from last year’s share.
Last year, the government allocated $1.804 trillion for defense for 2023-24, which is 13% higher than last year’s revision.
Last year’s defense budget was about 1.7 percent of GDP and 12.5 percent of total government spending for next year.
1.57 trillion has been allocated for defense and services in 2022-23. But, later on the high level of 1.59tr.
Finance Minister Muhammad Aurangzeb presented the $18.887 trillion 2024-25 Federal Budget after the National Assembly session was adjourned for an hour amid strong opposition protests.
Members of the Sunni Ittehad Council (SIK) protested outside the NA Speaker and raised slogans against the government’s budget policy. A copy of the budget reaches Parliament and is kept in a place designated by each member.
The federal cabinet has approved the budget for the financial year 2024-25. The cabinet meeting also approved a package for farmers, youth and industry.
Sources said the prime minister has approved a 25 percent increase in salary and pension for Grades 1 to 16 and a 20 percent hike for government employees in Grades 17 to 22.
