Acting President Sadiq Sanjrani on Monday approved the amended Finance Bill 2023-24, signing into law the recently added Rs. 215 billion in new taxes and reduced development expenditure for the new fiscal year.
The IMF-friendly budget, now totaling Rs. 14.4 trillion, targets an extra Rs. 215 billion in tax collection while cutting Rs. 85 billion from public spending in 2023-24.
The government’s revenue collection target has been revised to Rs. 9.41 trillion, with total spending at Rs. 14.48 trillion. The provinces’ share would be enhanced from Rs. 5.28 trillion to Rs. 5.39 trillion.
An amount of Rs. 801 billion has been budgeted for pension payments, up from Rs. 761 billion previously, while the multiple pension system has been abolished for 2023-24.
The amended Finance Bill 2023-24 also includes new income tax rates for the salaried class. A higher rate of income tax would now be applicable from July 1, 2023, where annual taxable income exceeds the updated cap on the maximum salary earned by an individual per year.
Pertinently, the International Monetary Fund’s current lending program is set to expire on June 30. Under the ninth review of the $6.5 billion Extended Fund Facility, the country has been seeking $1.1 billion in funding, but the bailout has been put on hold since November 2022.
