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Federal govt presents Budget 2024-25 amid ruckus in National Assembly

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Digital Desk

2 years ago

ISLAMABAD: Finance Minister Muhammad Aurangzeb presents the federal budget 2024-25 in the National Assembly as the government eyes on securing a long-term International Monetary Fund (IMF) bailout.

The Pakistan Tehreek-e-Insaf (PTI)-backed Sunni Ittehad Council (SIC) lawmakers have staged a protest in the National Assembly in a bid to disrupt the speech of the finance minister.

At the outset of his speech, Finance Minister Aurangzeb thanked Prime Minister Shehbaz Sharif, PML-N President Nawaz Sharif, leaders of the coalition parties including Bilawal Bhutto Zardari, Khalid Maqbool Siddique, Chaudhry Shujaat Khan, Abdul Aleem Khan, and Khalid Magsi for their guidance in preparing the budget.

Fiance czar said that, despite political and economic challenges, our progress on the economic front in the past year has been impressive. “PM Shehbaz Sharif and his team should be congratulated on his efforts in the past year to revive the economy,” he added.

Tax revenue target

The federal government has set a target of Revenue collection of the FBR at Rs12,970 billion during upcoming fiscal year.

Finance Minister Senator Muhammad Aurangzeb said in the budget speech that the target of non-tax revenue for the new financial year has been set at Rs4845 billion rupees.

According to the budget document, the target is to get Rs30 billion rupees from privatization.

The target of direct tax collections for the next year is Rs5512 billion and Rs5454.6 billion from income tax. The capital value tax for the next fiscal year has been increased by Rs5 billion to Rs15.66 billion. A tax collection target of Rs1591 billion rupees has been set for customs duty.

According to the budget document, a target of Rs 4,919 billion has been set for sales tax and Rs 948 billion for excise duty.

Increase in petroleum levy target

The federal government has set an ambition to collect Rs1.28 trillion through the petroleum levy in the upcoming fiscal year.

The revenue collection target of the outgoing fiscal year through petroleum levy was Rs869 billion, which saw an increase of 47.4pc from the outgoing year. The government recommended an increase in the levy from Rs60 to Rs80 per litre.

The government collected Rs960 billion from the PL, surpassing the original target. Considering that, the budget for the upcoming FY targets an additional collection of Rs321bn. If the proposal is approved, the petroleum prices are expected to move up from July 2024.

Likewise, Rs28bn is expected to be collected from the levy on crude oil. The newly introduced levy on gas is projected to generate Rs400 million. The proposal also seeks a 50 percent surge in the levy on high-octane, light diesel, and ethanol.

Income Tax Reforms

Finance Minister Muhammad Aurangzeb has announced major changes in the income tax structure. The Federal Board of Revenue (FBR) has implemented a key income tax increase following the announcement of the budget.

Citizens earning Rs 600,000 to Rs 1,200,000 annually will pay a 5% tax on their income monthly.

Human Development

The government will invest in Human Development and the top priority will be the development of the education sector.

In this regard, several plans have been proposed including the enhancement of infrastructure and education facilities in 167 public schools in Islamabad, a specific amount would be allocated.

A School Meal Program would also be introduced in 200 primary schools in Islamabad to enhance the intellectual and physical health of young students.

Moreover, the Finance Minister said that 26 colleges in Islamabad will be established into vocational institutes in collaboration with NUST, NUML, COMSATS, and NSU. “Early childhood Education centers will be established in 100 schools,” he said.

Defence Allocation

In the federal budget, Rs2,122 billion has been reserved for defense. It reflects a 19.29 percent increase as the allocation for fiscal year 2023-24 was Rs1,804 billion.

The federal government had allocated Rs920 billion in the federal budget for 2017-18, Rs1,100 billion in 2018-19, Rs1,153 billion in 2019-20, Rs1,289 billion in 2020-21, Rs1,370 in 2021-22 and Rs1,563 billion in the budget for 2022-23.

Energy Sector allocation

Referring to the energy projects, the minister said Rs21bn has been allocated for a 600 MW power plant in Jamshoro, Rs14bn for a 500 kV transmission line in Lahore, Rs18bn for the Karachi Coastal Power Project, and Rs45bn for the Mohmand Dam Hydro Power Project.

Major Points in Federal Budget 2024-25

101 percent increase in the development budget
81pc has been allocated for ongoing schemes and 19 for new schemes
25 percent increase in salaries for BPS1-16
22 percent increase in salaries for BPS17-22
15 percent increase in pension
Difficulties for non-filers to buy property
End in tax exemption proposed
17 major development projects included in the budget
Sales tax to be applied to various goods, services
15% Capital Gain Tax proposed on Real Estate
15% Capital Gain Tax proposed on Securities

Major allocations in Federal Budget 2024-25

Provinces – Rs7438 billion
BISP – Rs597 billion
National Highway Authority – Rs180 billion
Energy sector – Rs253 billion
Public Sector Development Programme (PSDP) – Rs1400 billion
Karachi IT Park – Rs8 billion
Cabinet Division – Rs75.77 billion
Climate Change Division – Rs6.25 billion
Defense sector – Rs2,122 billion
Interior Division – Rs9 billion
Petroleum Division- Rs3 billion
Telecommunication – Rs28 billion
SUPARCO – Rs35 billion
Railway Division – Rs43 billion
Revenue Divison – Rs17 billion
Water Resources –
Quaid-e-Azam Health Tower in Islamabad – Rs5 billion
Development projects in the poorest districts – Rs7 billion
Karakoram Highway project – Rs6 billion
Digitalization of the national economy – Rs4 billion
Establishment of Danish school in Islamabad – Rs2 billion
Establishment of 7 Danish schools in Azad Kashmir and Gilgit-Baltistan – Rs5 billion