Mohsin Siddiqui (Chief Reporter)
Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb addressed the National Assembly (NA) on Tuesday, concluding the debate on the Federal Budget 2024-25. In his address, Aurangzeb emphasized the government’s commitment to a homegrown reform plan designed to steer the country out of its current economic challenges, highlighting the necessity of substantial economic reforms.
“The Budget 2024-25 is based on a homegrown reform plan under which the government seeks to pull the country out of the current economic situation, necessitating economic reforms,” Aurangzeb stated at the beginning of his discussion.
Tax-to-GDP Ratio and Privatization Program The finance minister announced the government’s target to increase the tax-to-GDP ratio to 13 percent. This target is part of a broader strategy that includes pursuing a privatization program and implementing reforms in state-owned enterprises (SOEs) and the energy sector. These measures are intended to enhance efficiency and productivity across key economic areas.
Shift to Market-Driven Economy Aurangzeb underlined the government’s intention to prioritize the private sector. By correcting incentives and shifting from a government-led to a market-driven economy, the administration aims to create a more robust and dynamic economic environment that encourages private sector growth and investment.
Income Tax Front On the income tax front, Aurangzeb mentioned new compliance measures for non-filers. Before blocking mobile SIMs and banning international travel for non-filers, the government will provide an opportunity for a personal hearing. This step is part of a broader effort to increase tax compliance and transparency.
Foreign Assets Declaration He also noted that under Section 116, an explanation will be required in the declaration of foreign assets and assets of a spouse if the spouse is dependent on the taxpayer. This measure aims to enhance transparency and ensure comprehensive tax reporting.
Exemptions for Stationery Items Aurangzeb clarified that stationery items would continue to be exempt from sales tax, contrary to an earlier announcement that suggested an increase in GST on these items. This decision was made to avoid adding financial burdens on essential educational supplies.
Reduced Sales Tax Rate on Hybrid Vehicles The current reduced sales tax rate will continue to apply to Hybrid Electric Vehicles (HEVs) as mentioned in Schedule 8 and Serial No 73. This measure supports the adoption of environmentally friendly technologies and contributes to sustainable economic growth.
