Pakistan's government has intensified its efforts to raise revenue by introducing additional taxes in the revised Finance Bill 2024, seeking approval for the upcoming budget year. Here's a breakdown of the key changes:
- The initial budget for 2024-25 proposed tax measures worth Rs. 1.761 trillion. The revised bill raises this figure through new amendments.
- A 10% surcharge on income tax applies to individuals and businesses exceeding Rs. 10 million in taxable income.
- Education: A 10% sales tax on most stationery items (excluding exercise and textbooks) will increase costs for students and institutions.
- Construction: The Federal Excise Duty (FED) on cement rises from Rs. 3 to Rs. 4 per kg, potentially affecting construction costs.
- Travel: Increased excise duty on international air travel, including business and club class tickets for specific destinations. The amended Finance Bill 2024 includes a significant hike in the excise duty on business and club class air tickets. For economy and economy plus air tickets issued on or after July 1, 2024, a duty of Rs12,500 will be applicable.
- Sugar Industry: A new excise duty of Rs. 15 per kg applies to the supply of white crystalline sugar to manufacturers.
- Islamabad Property: A capital value tax (CVT) based on property area applies to farmhouses and residential houses in Islamabad. The CVT will be Rs500,000 for farmhouses with an area between 2,000 and 4,000 square yards and Rs1,000,000 for those exceeding 4,000 square yards. For residential houses, the CVT will be Rs1,000,000 for properties between 1,000 and 2,000 square yards and Rs1,500,000 for those exceeding 2,000 square yards.
- Reduced tax rates for certain hybrid vehicles extended until June 30, 2026.
- Sales tax benefits for the former FATA (Federally Administered Tribal Areas) extended until June 30, 2025.
- New tax on the allotment or transfer of commercial property and certain plots/houses.
Tax experts warn that these measures might increase the financial burden on individuals and businesses, impacting economic growth.
Stay tuned for updates on our WhatsApp Channel on the implementation of these revised tax measures and their potential economic effects. This revised budget reflects Pakistan's efforts to address fiscal challenges but raises questions about its impact on citizens and businesses.
Lead the firm’s financial strategy to ensure robust financial health and drive growth. Manage internal control, financial operations, budgeting, forecasting, cash flow planning, and management reporting.
5 个月there is no other way to take the relief and are unable to cut down the defense and ruling class budget any more
CA Finalist | Helping Businesses & Individuals Save on Taxes | Co-Founder TaxationPk
5 个月I appreciate the thoughtfulness and depth of your posts. They always leave me with something to think about.