Unleashing a tsunami of taxes, the Finance Bill 2024 cruised through the National Assembly on Thursday ahead of talks with the International Monetary Fund (IMF) for a fresh, longer, and larger bailout to save the economy—which is growing at the slowest pace in South Asia—from a sure debt default.
The federal government presented the tax-loaded Rs18.877 trillion budget for the fiscal year 2024-25 (FY25) two weeks ago, drawing sharp criticism from opposition parties, which termed it “economic terrorism” against the people.
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Finance Minister Muhammad Aurangzeb moved the finance bill to the lower house of the parliament, which was endorsed by the ruling alliance, including the Pakistan Peoples Party (PPP).
The motion was passed with majority vote which led to the passage of Finance Bill-2024 after clause-by-clause reading and adopting amendments after due process of voting.
All the amendments, presented by the opposition members, were rejected.
NA Speaker Sardar Ayaz Sadiq announced the passage of the bill in a live TV telecast.
Tough revenue target
Policymakers have set a challenging tax revenue target of Rs13 trillion rupees for the year starting July 1, up about 40% from the current year, in the national budget presented on July 12 that looked to strengthen the case for a new rescue deal with the IMF.
Pakistan is in talks with the IMF for a loan of $6 billion to $8 billion.
The rise in the tax target is made up of a 48% increase in direct taxes and a 35% hike in indirect taxes over revised estimates of the current year. Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64%.
The tax would increase to 18% on textile and leather products as well as mobile phones besides a hike in the tax on capital gains from real estate.
Workers will also get hit with more direct tax on income.
