NA passes tax-laden budget 2024-25

ISLAMABAD: The National Assembly on Friday passed the tax-heavy finance bill 2024 presented by PML-N led federal government for the upcoming fiscal year, despite strong opposition from Pakistan Tehreek-e-Insaf (PTI).

The move comes as the country seeks to avert a debt default and secure a new bailout package from the International Monetary Fund (IMF).

The finance bill, presented by Finance Minister Muhammad Aurangzeb, has been met with criticism from opposition parties, who argue that it will lead to high inflation and burden the common man.

The bill proposes a challenging tax revenue target of Rs13 trillion for the fiscal year starting July 1, a 40% increase from the current year.

The government’s decision to impose taxes on the salaried and middle-class people has been particularly contentious. The Muttahida Qaumi Movement-Pakistan (MQM-P), a ruling coalition partner, has expressed concerns that the budget 2024-25 will cause more inflation in the country.

Despite the opposition, the PPP, led by Naveed Qamar, decided to vote in favor of the finance bill, citing concerns that rejecting it would lead to instability in the country. The MQM-P has also expressed its reservations, but ultimately supported the bill.

IMF deal

The passage of the finance bill is a crucial step in Pakistan’s efforts to secure a new IMF bailout package as the country is seeking a loan of 8 billion to address its economic challenges.

The IMF has been pushing Pakistan to implement structural reforms and increase its tax revenue to address its fiscal deficit.

The finance bill proposes a range of tax measures, including a 48% increase in direct taxes and a 35% hike in indirect taxes over revised estimates of the current year.

The tax on textile and leather products, as well as mobile phones, will increase to 18%, while the tax on capital gains from real estate will also be hiked.

It is pertinent to mention here that the federal government presented the tax-loaded Rs18.877 trillion budget 2024-25 two weeks ago.