President Asif Ali Zardari assented to the controversial Finance Bill 2024, now Finance Act 2024 ushering in a new fiscal year with a heavy tax burden. The bill, passed by the National Assembly with amendments, drew criticism from opposition parties and even a coalition ally.
Key Points:
- Heavy Taxes: The government aims to generate additional revenue through new tax measures in various sectors. This is seen as crucial to meet the demands of the International Monetary Fund (IMF) for a $6 billion to $8 billion loan.
- Opposition Criticism: The Pakistan Tehreek-e-Insaf (PTI), led by former prime minister Imran Khan, strongly condemned the budget, calling it inflationary and detrimental to the people, industry, and agriculture.
- Amendments Made: The government introduced a capital value tax on Islamabad property, imposed new taxes on builders and developers, and partially rolled back a proposed hike in the Petroleum Development Levy (PDL).
- Lawmaker Perks Increased: An amendment allowing a raise in travel allowance and holding unutilized air tickets for a year was passed despite criticism.
- Economic Targets: The government projects a reduced fiscal deficit (5.9% of GDP) and economic growth (3.6%) for the coming year. However, inflation is anticipated to be around 12%.
Future Implications:
The IMF’s influence on the budget and the potential inflationary effects remain a concern. The success of the government’s revenue generation plan and its impact on the economy will be closely monitored in the coming year.
