President Asif Ali Zardari has approved the Finance Bill 2024 under Article 75 for fiscal year 2024-25.
The approval comes on the advice of Prime Minister Shehbaz Sharif following the budget’s passage through National Assembly on Friday.
The federal government had presented a Rs.18.9 trillion budget for FY25 two weeks ago. With several back-breaking amendments on Friday, the bill was passed with a majority vote, following clause-by-clause readings and amendments by Finance Minister Muhammad Aurangzeb.
Notable amendments in the budget include adjustments to the advance tax on the sale or transfer of immovable property for federal and provincial employees, armed forces personnel, and individuals injured in war.
The income tax rate for Association of Persons (AoPs) earning more than Rs. 10 million per year will now include a 10 percent surcharge on their income tax.
A 5 percent excise duty on lubricant oil is expected to bring in an additional Rs. 15 billion. FED on international travel tickets has also spiked, with economy class airfares taxed at Rs. 12,500 per ticket and business class facing higher rates depending on the destination.
A 3 percent FED has been imposed on the allotment or transfer of property by filers and 5 percent by non-filers. An 18 percent sales tax has been introduced on vegetables and fruits imported from Afghanistan, pencils, drawing materials, diagnostic kits, and tractors. A capital value tax has also been implemented on farmhouses and residential houses in Islamabad, with varying rates based on property size.
The new budget sets a challenging tax revenue target of Rs. 13 trillion for the year starting July 1. This target includes a 48 increase in direct taxes and a 35 percent hike in indirect taxes. Non-tax revenue, including petroleum levies, is expected to increase by 64 percent.
Workers will face increased direct taxes on income in the new fiscal year.
The budget also includes an 18 percent tax on textile and leather products, as well as mobile phones, and higher taxes on capital gains from real estate.
