President Asif Ali Zardari on Sunday approved the Finance Bill 2024 on the advice of Prime Minister Shehbaz Sharif. According to a press release from the President’s Secretariat Press Wing, the Finance Bill will take effect on July 1, 2024.
On June 28, the National Assembly passed the Finance Bill 2024 with certain amendments, incorporating the financial proposals for the fiscal year beginning on July 1, 2024. The amendments in the Finance Bill 2024 focus on non-filers, wealth statements, foreign assets, and withholding tax-related provisions.
In a significant move, the government decided to allow non-filers a chance to file tax returns before traveling abroad, based on the recommendation of the Senate Finance Committee. Initially, the Federal Board of Revenue (FBR) had proposed that non-filers would not be permitted to travel abroad.
An important clarification was added to the Finance Bill, explaining that any reference against the order of the Commissioner (Appeals) received after the commencement of the Tax Laws (Amendment) Act, 2024, where the value exceeds twenty million rupees, will be addressed by the High Court, regardless of pending proceedings prior to the Act’s commencement.
Pakistan’s parliament approved the government’s tax-heavy finance bill for the upcoming fiscal year on Friday, ahead of further discussions on a new bailout with the International Monetary Fund (IMF) to avoid a debt default. This is critical as the economy is currently growing at the slowest pace in South Asia.
Finance Minister Muhammad Aurangzeb presented the finance bill in parliament, which was endorsed by the ruling alliance led by Prime Minister Shehbaz Sharif. Despite some initial disagreements, the Pakistan Peoples Party, a major coalition partner, ultimately supported the budget.
Policymakers have set an ambitious tax revenue target of Rs13 trillion ($46.66 billion) for the fiscal year starting July 1, marking a 40% increase from the current year. The budget, presented on June 12, is seen as a crucial step in securing a potential IMF loan program of $6 billion to $8 billion.
The increase in the tax target includes a 48% rise in direct taxes and a 35% increase in indirect taxes. Non-tax revenue, such as petroleum levies, is expected to surge by 64%.
Notable tax hikes include an 18% tax on textile and leather products, as well as mobile phones, and increased taxes on capital gains from real estate. Additionally, workers will face higher direct taxes on their income.
The budget has drawn sharp criticism from opposition parties and business entities, which argue that the rising government expenditures leave little room for economic growth. The opposition, particularly parliamentarians allied with jailed former Prime Minister Imran Khan, have rejected the budget, citing concerns over its potential inflationary impact.
