He announced that the stationery items would remain exempt from tax while the current reduced rates for hybrid vehicles would also remain intact         Finance Minister Muhammad Aurangzeb is addressing the gong ceremony at the Pakistan Stock Exchange in Karachi on March 29, 2024. —X/@Financegovpk 

ISLAMABAD: Accepting the Senate recommendations, Finance Minister Muhammad Aurangzeb Tuesday announced changes in the proposed federal budget 2024-25 exempting stationery from tax and personally hearing the non-filers before blocking their SIMs and preventing them from proceeding abroad.

Winding up debate in the National Assembly on the Federal Budget 2024-25, he appreciated the recommendations submitted by the Senate and said the government had decided to include them in the budget keeping in view the public interest.

He announced that the stationery items would remain exempt from tax while the current reduced rates for hybrid vehicles would also remain intact. He said under the Export Facilitation Scheme 2021 policy, zero rating for the local suppliers was not being abolished. The finance minister said as per Section 116 with regard to the foreign assets of a woman, if she was a dependent of tax payers, her explanation would be included.

The minister said the percentage of default surcharge in the heads of income tax, sales tax and federal excise duty had been increased to plus 3 percent or 12 percent or whichever would be higher. He said the increase in fine on late filing of income returns had been conditioned to whether the filer was habituated to filing the returns late or not.

“There will be no increase in the percentage of fine for late filing if the filer has timely filed returns at least once in the last three years,” he said. Aurangeb said it had also been decided to extend the date of transfer appeals from the income tax commissioners to appellate tribunals from June 16, 2024 to December 31. He said a proposal for improvement in the draft of proposed Section 25 of Sales Tax Act, 1990 had also been accepted. He said as per directives of the prime minister, agriculture, health and education sectors were given special attention.

He said the government was also seriously considering proposals to continue exemption of sales tax on charity hospitals and rebate of income tax on salaries of professors. “We are seriously reviewing these proposals to accommodate in the final budget document,” he said. The finance minister told the House that one of priorities of the government was reduction in the inflation rate and for that purpose, a number of measures had been taken.

“As a result, the inflation rate has come down to 11.8 percent from 38 percent, while food inflation has been recorded at 2.2 percent in May,” he said, adding the government would continue its efforts for further reduction in the inflation rate.

He said in the new Public Sector Development Programme (PSDP), the ongoing projects would get priority and 81 percent development resources had been kept for these projects.

“Out of Rs1500 PSDP, the government has reserved Rs350 billion for the public-private partnership plans,” he said. As regards the defence budget, the finance minister said the armed forces had rendered immense sacrifices for the country’s defence and were standing firm to meet the internal and external threats.

“We will meet all the needs of our armed forces and will not allow any hurdle in this way, as national security is the foremost priority,” he said. He pointed out that home-grown reforms program was the basis of the next year’s fiscal budget in order to steer the country out of a difficult economic situation.

He said the reforms included enhancing the tax to GDP ratio to 13 percent, SOE reforms, public private partnership and energy sector reforms. The minister said the government was seriously committed to the plan and had started its implementation. He assured that all the stakeholders would be taken on board about the plan’s implementation.

He said the budget for the next fiscal year was aimed at reducing the fiscal deficit by focusing on the measures that enhance the government’s revenues and reduce unnecessary expenditures.

He said on the prime minister’s directions, the process of simplicity and austerity will continue in the next fiscal year.

He said a committee had been constituted under him which would present recommendations in this regard including closing down the ministries or their merger and devolution to the provinces.

The finance minister announced that the pension expenditures would be brought down through reforms in future.

He said the digitization process of FBR was being accelerated. He said legislation was being introduced in the parliament to bring changes in the boards of the power sector. The privatization of the PIA has been taken forward.

Aurangzeb said the government was fast-tracking reforms in the FBR and for this purpose, Rs7 billion had been earmarked in the budget.

From July 1, a strict action would be taken against the retailers failing to register themselves with the FBR’s ‘Tajir Dost Scheme’, said the minister.

Deputy Prime Minister Ishaq Dar, earlier said presenting recommendations to the National Assembly on the budget was a constitutional obligation of the Senate and this tradition had been continuing for many years.

He pointed out that a copy of the Finance Bill was also laid before the Senate, although passing it was the National Assembly’s prerogative.

Earlier, taking part in the budget debate, Sunni Ittehad Council (SIC) chief whip Aamir Dogar said the budget proposals did not provide any relief to the business and salaried class and agriculture sector.

He demanded withdrawal of increase in income tax on the salaried class, particularly those employed in the private sector.

He said the finance minister while winding up the budget speech should announce reduction in sales tax on the stationery items and infant milk.

He recalled that the PTI regime established South Punjab Secretariat by spending a hefty amount but the PDM government rolled the secretariat back and reduced the development budget to 26 percent.

He regretted the plight of the imprisoned PTI leadership, particularly the female leaders including Dr. Yasmin Rashid, Aliya Hamza and Sanam Javed, who are being kept in Gujranwala’s prison amid severe heat.

Aamir Dogar maintained that there could be no economic stability unless there was political stability in the country.

PMLN Shahid Usman Ibrahim said it was a difficult but good budget in difficult economic conditions. He said the economy was in the doldrums when the PDM government took over and decided to sacrifice their politics for the sake of national interest.

He said the agriculture sector could generate Rs200 billion annually if farmer-friendly policies were implemented. He observed that the inflation rate had also come down to 11.8 percent from over 30 percent last year.