Pakistan Protects Pensions in Upcoming Budget: Government Seeks Alternative Revenue Sources

Pakistan's senior citizens can breathe a sigh of relief. The government has withdrawn a major proposal from the 2024-25 budget that would have imposed a 10% tax on pensions exceeding Rs. 100,000 per month.

Prime Minister Intervenes for Pensioners:

• Initial Tax Proposal: The Federal Board of Revenue (FBR) included a tax on high pensions in the Finance Bill 2024.
• Shifting Focus: Prime Minister Shehbaz Sharif directed tax authorities to find alternative revenue sources, protecting pensioners from the tax burden.

Discussions with IMF on Budget Proposals:

• Virtual Talks: Pakistani officials reportedly held virtual discussions with the International Monetary Fund (IMF) regarding budget plans.
• Uniform Tax Focus: Discussions reportedly explored proposals for a uniform tax structure applicable to both businesses and salaried individuals.
• Pension Tax Issue Debated: Pakistan informed the IMF about their decision to forgo taxing pensions.

Uncertainties Remain:

• Proposals on Hold: Several significant proposals, including pension tax and potential sales tax increases, are currently on hold following the Prime Minister's directives.
• Further Discussions Needed: The Pakistani team is expected to brief Prime Minister Sharif on the details of their IMF talks.

Government Seeks Alternative Revenue Streams:

The decision to protect pensions creates a gap in the government's revenue generation plans. They are now tasked with identifying alternative measures to meet budget targets.

This article was published at Pakistan Rejects Proposal to Tax Pensions in Upcoming Budget