Islamabad:
Four days before the approval of fiscal measures worth RS435 billion announced in the budget, the Government proposed on Sunday a mini budget of RS36 billion and relieved the restrictions on the main purchases by people with declared assets declared insufficient.
The criteria reviewed aim to address public concerns about the negative impact of the general prohibition of economic activity by non -eligible people.
With the introduction of a mini budget before the planned approval of the 2025-26 budget on Thursday, the Government has imposed new new taxes worth RS462 billion. New taxes on chicken and a day rates have been imposed on the investment of companies in mutual funds and investment profits in government debt.
The government also agreed to relax the criteria for prohibiting economic transactions, such as buying a house, plot, car, investing in values and maintaining a bank account for those whose declared assets do not support these purchases. He had proposed to prohibit all these transactions if the declared assets do not support these purchases.
The Government has now proposed that the inelegability criteria will not be applied if the value of a car is up to RS7 million. The inelegability criteria would apply to the purchase of more than 100 million RS1 billion commercial plot and more than 50 million residential rupees.
The inelegability condition will be applicable if the cash in the bank account is greater than RS100 million per year in all the bank accounts of an individual. The inelegability condition in the stock market investment would be applicable if the accumulated investment in a year is more than RS50 million.
These limits have been established in the event that the taxes of the 5% richest in Pakistan and the rest of 95% do not have economic muscles to make large investments.
The new fiscal measures were presented to the Permanent Committee of Finance of the National Assembly, which supported the government’s proposals. The Syed Naveed Qamar of PPP presided over the committee meeting.
The Federal Income Board has proposed the measures of RS36 billion instead of reducing the proposed sales tax rate on the import of solar panels from 18% to 10% and finance an increase in the salaries of government employees to 10%.
To a extent that chicken prices in the country will increase even more, the government has proposed to slap the Federal Tax equal to RS10 in a one -day chicken. He has proposed amendments in the Federal Special Tax Law, 2005 to submit the new tax.
Last month, the International Monetary Fund (IMF) had rejected the government’s proposal to introduce a 5% Federal Tax in a day chicks. The IMF representative had indicated that, on the one hand, the FBR said there were high foods on food in Pakistan, and on the other hand, recommended such proposals.
President FBR Rashid Langial told the Permanent Committee that the new fiscal measures of RS36 billion aimed to compensate for the fiscal deficit due to the reduction of sales tax rate for solar panels and finance the increase in wages.
The permanent committee of the National Assembly remained without problems. Syed Naveed Qamar, Langarial Rashid and the newly appointed Minister of State for Bilal Kayani finance directed the committee in the presence of a powerful opposition. It was for the first time that the permanent committee of NA discussed and approved the budget.
The two members of the PTI of the National Assembly Arif Mobeen Jutt and Usama Mela played a very constructive role in the scrutiny of fiscal measures, which was also recognized by the Minister of Finance, Muhammad Aurangzeb.
In the budget, the government had announced 18% of the sales tax on the importation of solar panels. After reaching an understanding with the Popular Party of Pakistan, the Vice Prime Minister Ishaq Dar announced that reducing the 10%rate. The total estimated revenues of the 18% tax were RS20 billion, which is now projected at RS12 billion.
Similarly, the FBR and IMF had agreed to reduce the income tax rate for monthly salary income of RS100,000 from 5% to 1%. The Ministry of Finance had also proposed a 6% increase in salaries. Prime Minister Shehbaz Sharif decided to increase salaries at 10% at the cabinet meeting held one hour before the budget announcement.
The prime minister also decided at the same cabinet meeting as to finance the additional increase in salary, the lowest slab tax must be increased to 2.5%.
Secretary Finance Imdadullah Bosal had opposed to increase this tax to 2.5%. Now, the income tax rate for the lowest income slab of RS100,000 will be 1% and to finance the salary increase, the government has taken three measures.
The National Committee of Finance of the National Committee of the Assembly also agreed to increase the income tax rate from 25% to 29% in dividends received by a company of mutual funds that obtain income from the profits on debt.
It has also proposed to increase tax withholding from 15 to 20% in profits in investment in government values by institutional investors.
The Minister of Finance, Muhammad Aurengzeb, had announced new measures of 435 billion measures in the budget, including the introduction of RS2.5 per liter of carbon collection and up to 3% of the engine tax. Of the 435 billion RS435, FBR -related fiscal measures were RS312 billion.
After adjusting the negative impact of the solar panel tax, the Government has imposed RS462 billion for the value of new fiscal measures in the budget. He has established the annual fiscal objective of FBR in RS14.13 billion for the next fiscal year, which can be achieved in the back of these measures and the application promised by the FBR.
Currently, there are 15% income tax in the case of mutual funds, real estate investment trusts. Now it has been decided that there will be 15% of the Income Tax in the case of real estate investment trust, 25% in the case of mutual funds, depending on the proportional income derived from the average annual investments in debt and shares titles, respectively, and 29% of the income tax of the dividend received by a company of a mutual fund that derives the income of the profits in debt.
In the same way, there will be a 20% tax on the performance or profits paid by a banking company or financial institution in an account or deposit maintained with said company or institution; and 20% of yield or profits in government values paid to anyone who is not an individual.
The National Finance Committee of the Assembly also approved the Finance Law 2025-26 with certain recommendations, sent by the Permanent Committee of Finance of the Senate, as well as the recommendations of the NA Finance Committee.
The president of FBR said the government had shared six new tax measures with the IMF. Of these six measures, three have been approved by the IMF.
The government has also decided that a 10% uniform sales tax rate would be imposed on imported and local cotton aimed at addressing an anomaly that was creating problems for the local industry.
