Islamabad:
The Minister of Finance, Muhammad Aurengzeb, formally presented a mini budget of RS36 billion in the National Assembly and announced that excluding almost the entire population of revealing the source of income before buying a large house, a car or executing a bank account.
The limits established to reveal the source of income before making large purchases would now be directed only to car users of more than 1,600 cc, and people who have more of residential houses of a single quanal in the main cities and almost two houses in houses in other cities.
Indeed, this has converted the application initiative of the Federal Income Board (FBR) ineffective, which has also reduced the success rate to catch tax evaders to only 3.7%.
The FBR does not have the ability to persecute people once they have made these purchases, therefore, the government had planned to avoid purchases.
Aurengzeb made these ads while increasing the budget debate in the National Assembly. With the liquidation discourse, the formal process for the approval of the budget and tax measures of the next fiscal year has begun to end the approval of the Finance Law probably on Thursday.
The Minister of Finance presented three more budget proposals to the National Assembly, which also addresses a one-day chicks, to generate a total of RS36 billion in additional taxes in fiscal year 2025-26.
He proposed an increase in the tax rate on the income derived from the portion of debt of mutual funds issued to companies from 25% to 29%. The minister said that the other income of the companies were already taxed at the rate of 29%.
Aurengzeb said that the income tax rate on profits obtained by corporations and companies on investments in government debt also increases from 15% to 20%. The government has also proposed taxes on the poultry sector, where billions of investments of rupees are carried out, said Aurengzeb.
“It is proposed that a Federal Special Tax (FED) of RS10 per day of chicken of a day must be imposed on the hatchery chicks, so that this sector can also contribute to the national treasure,” he said. 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 minister said that these three additional measures will not affect the industry and that the load has been transmitted to rich people and institutions.
The Government proposed the measures of RS36 billion instead of reducing the proposed sales tax rate on the importation of solar panels from 18% to 10% and finance an increase in the salaries of government employees to 10%.
Aurengzeb said that the government has presented a balanced budget for fiscal year 2025-26. On the one hand, we have maintained the government’s expenditure under control, while, on the other, a lot of emphasis has been established in the increase in the tax base and its compliance, said finance minister.
Exclusion
Previously, the Government proposed that all these citizens be prevented from buying main assets, if their declared wealth does not support such purchases. But the Minister of Finance announced the measure to drastically tame these powers.
“On the instructions of the Prime Minister, this new law will not apply to the purchase of plots or residential houses worth up to RS50 million, commercial plots or properties worth up to RS100 million and vehicles worth up to RS7 million,” he said.
These limits are “too generous” and compromise the objective of linking purchases with white money, said a senior FBr official to Express PAkGazette.
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 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 by 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 inelegability condition will be applicable only if the cash in the bank account is more than RS1 billion 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.
One of the genuine concerns was that the FBR can end up exploiting people in the absence of a credible online platform to determine the eligibility of people to make these purchases. For this reason, the National Finance Committee of the Assembly Assembly had linked the implementation of these harsh conditions with the effectiveness of the online platform.
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.
He said the government would not tax the benefits after retirement in the form of switching and tip. But the annual pension of more than RS10 million will be taxed at a rate of 5%. On the instructions of the Prime Minister, pensioners over 75 are exempt from all types of taxes, he added.
The Government, in its attempt to promote affordable homes, would launch a 20 -year -old loan scheme for the low -income segment, Aurengzeb reported. He said that people who earn between RS600,000 and RS1.2 million annually will now be taxed in just 1%, 2.5% proposed in the budget.
He added that 18% of GST of 18% in imports of solar panels has been reduced to 10%, but said it would increase prices by just 4.6%.
Aurengzeb informed the House of Representatives that, on the special instructions of the Prime Minister, the existing Powers of the FBR with respect to the fiscal fraud and the amendments made through the Finance Law draft were reviewed again, under which the fiscal fraud has categorized in cognizable and non -recognizable crimes.
“In cases involved in RS50 million, the FBR may not arrest without a court order,” he said. In addition, the person can be arrested only if it does not become part of the investigation despite three notices; The defendant tries to escape; or manipulations with the registration.
He said that the arrest approval will be administered by a committee of three high -level members of the FBR, instead of an officer, and it will be necessary to present the persons arrested before the court of a special judge within 24 hours, “he said.
