By ISLAMABAD: Media reports have revealed that the federal budget for the fiscal year (FY) 2024-25 is anticipated to be presented on June 7, with an estimated total expenditure reaching Rs 16,700 billion. Initial projections suggest a substantial allocation of Rs 9,700 billion towards interest and loans, alongside Rs 1,500 billion for subsidies.
The reports suggest that tax revenue is expected to surpass Rs 11,000 billion, with direct taxes contributing Rs 5,300 billion and federal excise duty adding Rs 680 billion to the coffers. Sales tax is poised to yield over Rs 3,850 billion, while customs duty is forecasted to bring in more than Rs 1,100 billion.
Non-tax revenue is estimated at Rs 2,100 billion, with the petroleum levy anticipated to generate Rs 1,100 billion. The looming budget deficit is projected to hover around Rs 9,300 billion, as per media reports.
Furthermore, in response to IMF pressure, the Pakistan government is contemplating ending tax exemptions in the forthcoming FY budget. Among the proposals is the imposition of sales tax on tractors and pesticides, potentially affecting agricultural costs.
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Presently, pesticides and registered tractors enjoy exemptions under the Sales Tax Act’s Sixth Schedule. However, there are discussions about revoking these exemptions and introducing a lower sales tax rate on both tractors and pesticides.
This move could significantly impact farmers, raising the cost of agricultural essentials and potentially burdening those reliant on these products.
Additionally, commercial importers may face withhold tax in the upcoming budget, aiming to generate an additional Rs 30 billion in taxes.
The International Monetary Fund (IMF) has urged Islamabad to implement “strong cost-side reforms” to rejuvenate Pakistan’s energy sector amidst concerns over low external financing potentially squeezing private sector credit.
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