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Monday, June 24, 2024  
17 Dhul-Hijjah 1445  

NA passes budget with Rs215b additional taxes to give IMF final nudge

Ishaq Dar announces measure to accommodate IMF demands
Budget 2023-24: Government imposes PKR 215bn taxes- Aaj News

The federal budget for the fiscal year 2023-24 was passed in the National Assembly on Sunday, with the government incorporating last minute changes to try to push the IMF into releasing funds as funding deadline expires.

The PDM-led government revised the federal budget for the fiscal year 2023-24 before its passage in the National Assembly, relaxing the condition for income tax on the super-rich and introducing new rules to lower the pension bill of the country. Petroleum levy has also been raised to Rs60 from Rs50.

The budget was passed in a quite session without the required quorum present.

The government has also increased tax collection targets by Rs215 billion to accommodate IMF demands, Finance Minister Ishaq Dar said.

Dar announced the changes as he wrapped up the debate on the budget in the lower house of the parliament.

The government will likely increase the petroleum development levy (PDL) by Rs10 per liter on petrol and high-speed diesel.

The government will likely increase the petroleum development levy (PDL) by Rs10 per liter on petrol and high-speed diesel.

Related: Reports say announcement of Pakistan-IMF deal imminent

Ishaq Dar said that a finance ministry team had held talks for three days with the IMF in Paris to reach an agreement on the 9th review of the program and that the government is going to introduce more taxes to the volume of Rs215 billion. The FBR revenue target will be increased to collect an additional Rs215 billion.

The government will also reduce its expensing by cutting Rs85 billion from the current account expenditure, however, the cut will not be made in the development budget, the minister said.

Shortly before Dar spoke in the Parliament, reports said Pakistan had given in to IMF demands and was going to modify the budget proposals.

Ishaq Dar announced the following key changes in the budget:

  • The super tax will apply to people earning Rs500 million annually or more. In the original budget proposal, it was levied on people earning Rs300 million per annum. The government has relaxed the conditions.

  • The Rs2,000 per unit tax on conventional electric fans has been deferred for six months. It will now apply from January 1, 2024. The tax was being levied to promote energy-efficient fans.

  • On the suggestions from the PSX, the alternate dispute resolution mechanism ADRC will be revised.

  • The Utilities Store Corporation received Rs24 billion in the outgoing fiscal year. For the next year, Rs35 billion has been allocated. So, the government is not withdrawing this subsidy.

  • Similarly, for the Benazir Income Support program Rs450 billion was allocated for the next fiscal year. Now, the allocation has been increased by Rs16 billion to Rs466 billion on the recommendation from the PPP. This is another form of direct subsidy.

  • Saving scheme investment sealing has been increased to Rs7.5 million for the pensioners scheme as well.

  • Under the revised budget, the government can impose up to Rs60 per litre petroleum development levy on petrol and high-speed diesel. The powers for an unlimited increase had been introduced in the draft budget but have been withdrawn now. Currently, PDL stands at Rs50 per litre and the government will likely increase it by up to Rs10 per litre at the start of new fiscal year on July 1.

  • Only a single pension will be given to people who retired from multiple organizations in grade 17 or above. Dar said some ’high profile people were drawing pensions from three organizations. After the death of a retired government employee, the family will receive a pension only for ten years.

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Ishaq Dar

imf Pakistan

Budget 2023 24