Finance Minister Muhammad Aurangzeb has unveiled the Federal Budget 2024-25 valued at Rs. 18.887 trillion in the National Assembly session, following a slight delay due to opposition protests. Despite the disruption, budget copies were distributed among members.
Key Points of Federal Budget 2024-25:
- Kissan Package: A substantial allocation of Rs. 5 billion has been made for farmers’ support, with plans to engage the private sector for investment.
- Energy Sector Development: Rs. 253 billion has been earmarked for energy projects, with Rs. 65 billion designated for electricity infrastructure and Rs. 5 billion for distribution improvement. Additionally, Rs. 21 billion has been allocated for the Jamshoro Power Plant and Rs. 11 billion for NDTC system enhancements.
- Solar Panel Industry Support: Import taxes on solar panel industry equipment have been waived to encourage growth, including exemptions for raw materials, machinery, solar panels, inverters, and batteries.
- Fishery Sector Incentives: Import tax discounts are proposed for fish and shrimp breeding seed and feed to support the fisheries industry.
- Pension Reforms: Reforms in the pension scheme aim to reduce expenses significantly over the next three decades. A new pension scheme for government employees will entail monthly salary deductions.
- Salary Assurance: Full funding for the salaries of new government employees has been assured.
- BISP Budget Increase: A notable 27% increase in the Benazir Income Support Program (BISP) budget, raising it to Rs. 593 billion, with eligibility extended to 10 million individuals.
- Education Scholarship Expansion: Plans include the inclusion of 10 million more children in the education scholarship program.
- Tax Measures: Income tax exemptions in erstwhile FATA and PATA extended by a year. Advance tax on vehicle registration to be based on price, not engine capacity. Increased advance and withholding tax for non-filer retailers and wholesalers from 1% to 2.25%.
- Sales Tax Adjustments: Sales tax increased to 18% on branded shoes and clothes. Sales tax exemptions abolished, with a standard rate imposed on various goods. Additional levies introduced on mobile phones, copper, coal, paper, and plastic scrap products.
- Customs Duties: Import duty on luxury vehicles reinstated, with increased taxes on vehicles worth $50,000. Import duty eliminated on imported glass products, while rates increased for steel and paper products.
- FED and Property Tax: Federal Excise Duty (FED) on cement raised from Rs. 2 to Rs. 3 per kg. Property tax imposed at 5% on new plot and property purchases.
- Minimum Salary Increase: Basic salary raised from Rs. 32,000 to Rs. 37,000 per month to mitigate the impact of inflation on purchasing power.
- Tobacco Taxation: Stricter measures against fake cigarette sales introduced, with a Rs. 44,000 tax on cigarette filter materials.
The budget speech underscored the government’s commitment to economic progress amidst challenges, aiming for sustainable growth and stability. The measures outlined reflect a strategic approach towards fiscal management and economic development.
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