Federal Minister for Finance and Revenue Muhammad Aurangzeb addressed the concerns of various stakeholders regarding the recently presented budget for the fiscal year 2024-25. Speaking to media personnel, Aurangzeb highlighted key initiatives aimed at broadening the tax base, digitizing the economy, and promoting sustainable economic growth.
Aurangzeb emphasized the critical need to increase the tax-to-GDP ratio, which he described as currently unsustainable. “In three years, we aim to enhance this ratio to 13%,” he declared. The minister stressed the importance of ending the undocumented economy and moving towards a fully digitized financial system.
Addressing the proposed increase in the Petroleum Development Levy from Rs60 to Rs80, Aurangzeb explained that this hike would be implemented gradually over the next fiscal year. The PDL will be closely linked to international oil prices to ensure a balanced approach.
The finance minister assured that the Rs600,000 annual salary threshold for tax exemption remains unchanged. Similarly, the top tax slab of 35% has also been retained. However, he noted changes in the salary slabs and an increase in transaction taxes for non-filers. Aurangzeb reiterated the government’s intent to eliminate the concept of non-filers entirely.
Aurangzeb highlighted the necessity of incorporating the retail and wholesale segments into the tax net. “We initiated voluntary registration of retailers in April. Starting from July, we will begin imposing taxes,” he announced. The minister pointed out that Rs9 trillion in cash remains in circulation, underscoring the extent of the undocumented economy.
The Export Refinance Scheme is being transferred from the State Bank of Pakistan (SBP) to EXIM Bank. Aurangzeb mentioned that a significant portion of the refinance fund would be allocated to the SME sector, reflecting the government’s commitment to supporting small and medium enterprises.
The country’s IT exports have reached $3.5 billion, with the government aiming to increase this to $5 billion. “Our focus is to provide maximum facilities to the IT sector,” Aurangzeb said, signaling continued support for this critical industry.
of Finance, Imdadullah Bosal, discussed the targeted inflation rate of 12% for the upcoming fiscal year. He described this target as realistic, noting that the policy rate remains at 20.5%, which is high enough to lead to demand compression.
Aurangzeb provided updates on the government’s privatization plans, noting that transactions involving Pakistan International Airlines (PIA) and Islamabad Airport are progressing. “Both these transactions will be completed by August. Concurrently, we are preparing documentation for the privatization of Karachi and Lahore airports,” he added.
