The Rs.18,877 Billion Annual Budget Pakistan 2024 has been a hot debate since it was unveiled. While the government claims to be geared toward sustainable growth and inclusive reforms, the recent budget stirred the nation. From the corridors of assemblies to TV lounges and streets everyone has their remarks regarding the finance bill 2024. Today, let’s have highlights of Budget Pakistan 2024. 

Key Targets of Budget Pakistan 2024

While the government aims to have 3.6% GDP growth, it has given FBR a target to generate tax revenue of 13 trillion rupees ($47 billion). As they assume, it will create a jump of 40% from the current year and a drop of 5.9% in fiscal deficit. To achieve these targets, the govt proposes the following mechanisms. 

• Tax exemptions withdrawal
• Tax increases for corporate exporters
• Increase in personal income tax
• Increase in non-filers tax ratio
• Hike in fuel price

Health & Education Budget Pakistan 2024

Starting with the two major sectors, Rs. 93 billion for education and Rs. 27 billion for health is allocated in Budget Pakistan 2024, the government seems interested in upgrading the health and education infrastructure of the country.  

Defence Budget Pakistan 2024

The finance ministry has proposed a sparkling Rs. 2.12 trillion budget for Pakistan’s defense sector, a 17.5% increase, for the rising geopolitical rifts and the need for advanced security measures. 

Taxes on the Cigarette Industry in Budget Pakistan 2024

• The proposed withholding tax rates for cigarette distributors are increased from 1% to 2.5%.
• The proposed FED on Acetate Tow, a fiber used in cigarette filters, is proposed to be 44,000 rupees per KG.
• FED 10,000 rupees per kg on e-liquid for electric cigarettes, or 65% of the retail price is proposed by FBRFED on Nicotine pouches, at 1200 rupees per kg proposed

Sales Taxes from Sheermal to Hybrid Vehicles

• Stationary items are proposed to be taxed at 10%
• 10% sales tax on imported personal computers, laptops, and notebooks. 
• 10% sales tax on vermicelli, sheermall, bun, and rusk
• Withdrawal of concession on duties on import of hybrid vehicles
• Reduction in the concession of custom duties on the import of electric vehicles having a value above $50,000
• Unpacked milk is proposed to be exempted from sales tax
• Proposal to impose 6% and 12% tax for FY 2025 to FY 2026 respectively on supplies and imports of plants, machinery, and electricity in tribal areas
• Sales Tax on supplies, import of plant, machinery, and electricity in tribal areas at reduced rates: 6% and 12% for FY 2024 & 2025
• Sales tax levy proposed to be exempted on POl Products which are petrol, High-Speed Diesel (HSD), Light Speed Diesel, and Kerosene which was previously a zero-rated supply
• FBR proposes to abolish the exemption of sales tax on stationary items and tractors
• Sales tax on medicaments or medical drugs is proposed to be increased from 1% to 18%

Sales Tax on Mobile Phones

The government has proposed a flat 18% sales tax on all cellular phones up to the value of $500. For products above $500, the ad valorem (according to the mobile’s value) sales tax will be for the following categories;

• 25% for imported completely built
• 18% for imported semi-built
• 18% for locally manufactured completely built 

It is proposed to introduce an 80% sales tax withholding for industries like, coal, silica, cement, crush, and stone. Learn more about new taxes on real estate. 

Taxes on Textile Industry

The General Sales Tax on the textile industry is increased from 10% to 18% and a 10% sales tax is proposed on oil cakes. 

All Pakistan Textile Mills Association (APTMA) and Pakistan Cotton Ginners Association (PCGA)  have shown reservations about the recent taxation proposals, terming it as a move to curtail the growth of the textile industry. As the ginning industry already pays 72% General Sales Tax (GST), APTMA & PCGA stated that the new taxes will decrease employment and decline exports.

Federal Excise Duty (FED)

• 5% FED is proposed for the allotment and transfer of commercial and residential property
• 15 rupees per kg FED proposed on supply of sugar to manufacturers
• FED 3 rupees per kg proposed for cement 
• The government has also proposed to continue FED exemption on the import of machinery for farming and fishing.

What’s there for Government Employees?

• 25% increase in government employees from grade 1 to 16
• 20% increase in government employees from grade 17 to 22
• 15% increase in pension of government employees
• Minimum wages will increase from Rs. 32,000 to Rs. 37,000

INCOME TAX ON NON-SALARIED INDIVIDUALS

According to the Budget Pakistan 2024, there will be no income tax if the annual income is up to Rs. 600,000. There are 5 taxable slabs ranging from 15% to 45%.

• Taxable income not exceeding Rs. 600,000 is 0%
• Taxable income between Rs. 600,000 to 1200,000 is 15% of the amount exceeding Rs. 600,000
• Taxable income between Rs. 12,00,000 to 16,00,000 is Rs. 90,000+ 20% of the amount exceeding Rs. 12,00,000
• Taxable income between Rs. 16,00,000 to 32,00,000 is Rs. 170,000+ 30% of the amount exceeding 16,00,000
• Taxable income between Rs. 32,00,000 to 56,00,000 is Rs. 650,000+ 40% of the amount exceeding Rs. 32,00,000
• Taxable income exceeding Rs. 56,00,000 is 1610,000+ 45% of the amount exceeding 56,00,000

INCOME TAX ON SALARIED INDIVIDUALS

• According to the Budget Pakistan 2024, there are 5 taxable slabs ranging from 5% to 35%
• Taxable income not exceeding Rs. 600,000 is 0%
• Taxable income between Rs. 600,000 to 12,00,000 is 5% of the amount exceeding Rs. 600,000
• Taxable income between Rs. 12,00,000 to 22,00,000 is Rs. 30,000+ 15% of the amount exceeding Rs. 12,00,000
• Taxable income between Rs. 22,00,000 to 32,00,000 is Rs. 180,000+25% of the amount exceeding Rs. 22,00,000
• Taxable income between Rs. 32,00,000 to 41,00,000 is Rs. 43,000+30% of the amount exceeding Rs. 32,00,000
• Taxable income exceeding Rs. 41,00,000 is Rs. 700,000+35% of the amount exceeding Rs. 41,00,000

What Industrialists Say for Budget Pakistan 2024

The business community and industrialists have termed the recently proposed Budget 2024 more beneficial for state-to-state business and less valuable for B2B. Reviewing the proposed taxes on the cellular phones industry, we have observed the views of Mr. Julian Gorman, who is head of Asia-Pasific at GSMA, he says increased taxation on the mobile phones industry will discourage investors from entering the Pakistani market which is only 40% and has to reach 70% per the 60% smartphones users in the country.

What’s good in the Budget Pakistan 2024? 

A good thing to notice in the Budget Pakistan 2024 is that the government has proposed incentives to those who manufacture solar panels and allied equipment. Health insurance for journalists and media personnel is also considered a historic step taken by the government. We have also observed some thrilling proposals in Finance Bill 2024, the Intelligence Bureau (IB) is proposed to be a government agency that will assist customs in investigations.