Pakistan’s Upcoming Budget 2024-25: Tax Proposals and Implications

The federal government is set to present the budget for the upcoming fiscal year 2024-25 on June 12, with tax proposals currently under consideration. According to sources, the Federal Board of Revenue (FBR) has proposed a tax target of Rs 13 trillion, a significant increase from the current year’s target of Rs 9,415 billion. The new budget may also impose additional taxes of Rs 2 trillion.

GST Rate Hike and Its Impact

The GST rate is likely to increase from 18% to 19%, resulting in an additional revenue of Rs 100 billion. Petroleum products will also see a GST hike from 0% to 6%, generating an additional Rs 600 billion in revenue. Furthermore, the GST exemption on certain items may be withdrawn, resulting in an estimated additional revenue of Rs 550 billion.

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Impact on Consumers

The proposed tax measures and GST rate hike may lead to a significant increase in prices of various essential and luxury items, including food products, cosmetics, clothing, electronics, and more. Consumers may face higher prices for everyday items like milk, sugar, cooking oil, shampoo, toothpaste, and soap. The prices of clothing, footwear, and accessories may also increase.

Industry Reactions

The proposed tax measures have raised concerns among industry stakeholders, who fear that the increased costs may lead to higher prices for consumers and potentially negatively impact the economy.

Conclusion

The upcoming budget 2024-25 and proposed tax measures have sparked debate and concern among various stakeholders. While the government aims to increase revenue and meet IMF demands, the potential impact on consumers and the economy remains a significant concern.