Proposals for Tax Reforms in Pakistan’s 2024-25 Federal Budget
Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb unveiled significant tax policy amendments during the presentation of the federal budget for the fiscal year 2024-25 and increase Tax on Mobile phones,
Sales Tax Adjustments for Mobile Phones:
In his budget speech to the National Assembly, the finance minister disclosed the government’s proposal to levy an 18 percent sales tax on various categories of mobile phones. This measure is aimed at augmenting revenue generation.
Removal of Exemptions and Import Duty Increases:
The federal government has proposed substantial changes in tax policies, including the withdrawal of exemptions on select items based on their categories. Additionally, there’s a plan to escalate import duties, particularly targeting luxury cars valued over $50,000. The budget proposal also includes a call for increased import duties on steel and paper products.
Income Tax Rate Revision for Non-Filers:
The government has amplified the income tax rate for non-filers purchasing prepaid internet and phone cards, as well as units for electronic mediums, to a hefty 75 percent of the bill or sale price. This measure aims to broaden the tax base and enhance revenue collection.
Enhanced Tax Compliance Measures:
To bolster tax compliance, the government has implemented significant changes for non-filers of income tax returns. As a result, 11,252 SIM cards belonging to non-filers have been blocked thus far.
Revisions in Income Tax Withholding Rates:
Documents about the Budget 2024-25 reveal proposed changes in income tax withholding tax rates. The government suggests that individuals mentioned in income tax general orders, specifically non-filers among mobile users, should be subject to a 75 percent tax collection rate on internet prepaid cards, prepaid telephone cards, or electronic medium units.
Conclusion:
The proposed tax reforms outlined in the 2024-25 federal budget underscore the government’s commitment to enhancing revenue streams and promoting fiscal sustainability. These measures signal a proactive approach toward addressing fiscal challenges and fostering tax compliance across various sectors of the economy.