The stationery items would remain exempted from tax, Finance Minister Muhammad Aurangzeb said on Tuesday as a Senate panel expressed dissatisfaction over levies on stationery and essential daily items.
“The budget for the next fiscal year is aimed at reducing fiscal deficit by focusing on measures that enhance the government’s revenues and reduce unnecessary expenditures,” he said while delivering his speech on the budget 2024-25 in the National Assembly.
The federal government presented an Rs18.87 billion budget on June 12 and set a challenging tax revenue target of Rs13 trillion for the year starting July 1 that looked to strengthen the case for a new bailout deal with the IMF.
Pakistan is in talks with the lender for a loan of $6 billion to $8 billion, as it seeks to avert a default for an economy growing at the slowest pace in the region.
While winding up the discussion on the budget in the lower house of Parliament, he said that the “process of simplicity and austerity” would be continued in the next fiscal year.
A committee headed by PM Shehbaz has been constituted which would present recommendations in this regard including closing down the ministries or their merger and devolution to the provinces.
The finance minister announced that the pension expenditures “will be brought down through pension reforms in future.”
Last month, the three federal ministers said the government was considering raising the retirement age to control the pension burden. They clarified that if approved, the decision would be applicable across the board.
While talking about the pension reforms, Law Minister Tarar said on May 7 that it would be across the board and the government does not have the “clarity” on the age. He added that the government wanted to have a “breathing space” in the financial situation and admitted that the public sector was a big pool where a large amount of money is gone for salaries, retirement benefits, and pensions.
He pointed out that the home-grown reforms programme was the basis of the next year’s fiscal budget to steer the country out of a difficult economic situation.
He said the reforms include enhancing the tax-to-GDP ratio to 13%, SOE reforms, public-private partnership and energy sector reforms. “The government is seriously committed to this plan and started its implementation. All the stakeholders will be taken on board about the implementation of this plan,” he said.
Aurangzeb was appreciative of the recommendations submitted by the Senate for inclusion in the next year’s budget. “The government has decided to include these recommendations in the budget keeping in view the public interest,” he said and added that they included providing an opportunity to the non-filers for personal hearing before implementing the measures of SIM blockage and ban on foreign travel.
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He added that the existing reduced rates for Hybrid-Electric Vehicles would remain intact. Under the Export Facilitation Scheme 2021 policy, the finance minister said that zero rating for the local suppliers was not being abolished.
Aurangzeb added proposals such as exempting charity hospitals from sales tax “will be given a serious consideration.”
He said: “Action will be taken against the retailers from July 1 for failing to register them with the FBR Tajir Dost Scheme.”
The finance minister announced honoraria equivalent to three months of basic pay for various departments including the staff of the National Assembly, Senate, PID, Radio Pakistan, PTV and APP, who performed duties in the Parliament House during the budget session.
