Islamabad:
The National Assembly approved on Thursday the budget of RS17.6 billion values together with RS463 billion new taxes, carrying the digital economy under the scope of fiscal laws, but almost annulled the largest execution measure to prohibit the economic transactions of ineligible persons.
The National Assembly approved the second budget of the Government of Prime Minister Shehbaz Sharif with a comfortable majority. During a vote in a clause, the coalition government gathered the support of 201 members of the National Assembly against 57 votes of the opposition parties.
It was also the second budget presented by Finance Minister Muhammad Aurengzeb in the National Assembly. With the approval of the Assembly and the subsequent assent of President Asif Ali Zardari, the 2025 Finance Law will enter into force as of Tuesday.
The National Assembly approved a budget of RS17.6 billion for fiscal year 2025-26, which makes the highest assignment of RS8.2 billion RS8.2 for interest payments.
Defense spending would consume RS2.55 billion, the largest expense in the budget, excluding expenses in the Armed Forces Development Program and Military Pensions.
Subsidies are the third largest head with more than RS1.1 billion allocation, followed by more than RS1 pensions, RS1 billion for development spending and another 917 billion rs917 billion to administer the civil government.
The National Assembly also effectively approved the income of the Beaconhouse National University, the Federal University of Ziauddin, the Punjab Police Welfare Organization and the benevolent fund of army officers and a deconsoral family scheme of the tax.
The National Logistics Cell Tax (NLC) has been established at a minimum of 3% of the gross value of contracts. But if the total responsibility is more than the tax collected, the NLC will be charged to the normal income tax rate of 29%, according to the bill approved by the National Assembly.
The arrest powers for the Federal Revenue Board will remain in the law, but with the inclusion of some more safeguards, as the Popular Party of Pakistan Bilawal Bhutto Zardari and the Vice Prime Minister Ishaq Dar declared so much.
This is the best budget that any government can give in challenging circumstances, said President FBR while talking with the Express PAkGazette. He said that some fundamental principles have been established in the budget, including the creation of deterrence against fraud and grant a framework for the registration of taxpayers for the purposes of sales tax.
To discourage the use of cash, President FBR said the National Assembly has approved not to give the assignment of expenses in case the cash value is exceeding RS200,000. In the same way, the entry tax adjustment has also been rejected in the cash payments of the supplies beyond a certain threshold, he added.
Langrial said that foreign suppliers and digital markets have also been carried out under the scope of tax laws.
The National Assembly approved the new fiscal measures worth RS463 billion, including RS36 billion that were introduced after the presentation of the budget at the National Assembly on June 12. The most important measures in the budget were to impose taxes, both in sales and income, on online platforms, electronic commerce, cash delivery and taxes on digital services such as transmission.
A new climate support tax RS2.5 per liter per liter of each liter of gasoline and diesel is imposed. Another new tax of 1% to 3% in conventional fuel cars has been imposed to subsidize electric vehicles. Pensioners have been brought to the fiscal network, but only annual pensions of more than RS10 million are taxed at a rate of 5%. The fourth new tax is RS10 Federal Taxes in each one -day chick that is sold in the country.
The Government had claimed to raise RS389 billion in the next fiscal year of the largest application measure of prohibiting economic transactions by inelegable people. The Minister of Finance had warned in his press conference after the budget that if the Parliament did not approve this law, up to RS500 billion mini budget would have to be introduced.
The Government on the “instructions” of Prime Minister has domesticated these strict powers.
The National Assembly approved that the prohibition of buying a residential plot or houses by a non -eligible person will apply only if the value of the property exceeds RS50 million. This limit is greater than RS100 million for plots or commercial properties. Inelegable people can still buy up to RS7 million cars.
President FBB rashid langial said that in the first step, the government has established the principle of inelegable and the limits can be reviewed in the future.
Earlier this year, the president of FBR had informed the National Finance Committee of the Assembly Assembly that, due to almost no FBR capacity to audit the tax statements, the success rate in asking people about the source after making these purchases was only 3.7%.
The inelegability condition will be applied only if the cash removal value of the bank account is exceeding RS100 million per year. The inelegability condition in the stock market investment would be applicable if the accumulated investment in a year is more than RS50 million.
However, not eligible people cannot keep savings accounts in banks.
The Minister of Finance also announced to exempt a residential owner of a payment of up to 6.5% tax withholding at the time of sale, if the property is sold after retaining it for at least 15 years.
The National Assembly also approved to increase the income tax rate on the income derived from the portion of debt of mutual funds issued to companies from 25% to 29%. He also approved to increase the income tax rate on profits obtained from granting loans from the government 15% to 20%.
The National Assembly slapped a Federal Special Tax (FED) of RS10 for a day chick. The Government has estimated that around 1.5 billion chicks occur every year and will raise RS15 billion by taxing a product that is a common diet of the poor and rich.
The National Assembly approved 10% of the sales tax on the importation of solar panels.
Arrest powers for fiscal fraud
The National Assembly approved to grant the arrest powers to the FBR in cases of sales tax fraud after multiple rounds of negotiations between the PPP and the PML-N.
According to the law approved by the National Assembly, a person cannot be arrested at the investigation stage of sales tax fraud. In case of arrest, the defendant will have the right to obtain a bond of the court. These two new safeguards were added after the last round of negotiations between the PPP and the PML-N on Wednesday.
The president of the Peoples Party of Pakistan, Bilawal Bhutto Zardari, said on Thursday that his party supported the federal budget from all over heart after the government accepted its demands to exempt the income tax of the salaried people who earned RS100,000 and reduce the tax on sales of solar panels.
However, unlike Bilawal’s statement, the Government has not exempted the 1.2 million salaried income of RS1.2 million tax. The income tax rate at RS1.2 million annual income will be 1%, compared to 5% before the budget, according to the bill approved by the National Assembly.
The income tax on the annual income of RS1.2 million has been exempt from the demand for PPP, said Bilawal Bhutto while talking on the house of the house.
Bilawal also said that the Government also agreed the PPP reserves on giving arrest powers to the FBR. The government agreed that the arrest powers will only be limited to the falsification of sales tax and in the investigation stage a arrest will not be made, Bilawal said.
Fiscal fraud will also be a bail crime, said the president of the PPP while announcing his party’s agreement with the government on the arrest powers.
The Express PAkGazette reported Thursday that the PPP had refused to vote the bill due to a proposal to give arrest powers to the FBR. However, the Vice Prime Minister Ishaq gave PPP to withdraw objections.
Giving also told the Express PAkGazette that new safeguards have been added to the Finance Law to address the concerns of the PPP.
The president of the PPP said that the Government also increased the BISP budget by 20% in the demand of the PPP. The Government has assigned RS716 billion for the BISP for the next fiscal year.
