Senate budget recommendations propose salary increase, tax relief for salaried class

ISLAMABAD: The Senate has provided many budget proposals that demand increments in the salaries of employees of the federal government, tax relief to certain categories of people, and reforms in the tax structure and public expenditure pattern of the coming fiscal year.

As per the recommendations, the salaries of federal government employees will be raised by 15 percent, whereas the frozen medical allowance of both federal government employees and pensioners will be restored.

The proposals have also suggested the reduction of the tax liability of the salaried class and the poor, as well as GST on essential products such as food articles, medicines, textbooks, and agricultural inputs. The establishment of a separate fund is also recommended for the reduction of electricity rates.

Moreover, the recommendations of the Senate include heavy relief to the agricultural sector by providing zero tax and duties on fertilizer, seeds, pesticides, diesel, and agricultural machinery to encourage the farmers.

Apart from it, the recommendations also include provision for the increase of funds for hospitals and health care, higher education, and a scholarship scheme. There will be an effort to decrease non-development expenditures.

For the IT industry, the recommendations propose the extension of the tax exemption period for exporters and freelancers by another 10 years.

From the point of view of revenues, the Senate has proposed levying higher taxes on luxury consumption, such as vehicles with engine sizes above 3,000cc, property, and non-productive assets. In addition, they have proposed decreasing indirect taxes on basic goods along with widening the tax base.

In addition to that, they have recommended the simplification of the tax structure for small and medium-sized firms and the removal of additional charges and taxes from electricity bill payments of domestic and poor people.

Additionally, it is proposed that individuals coming to or living in Pakistan be allowed to import alcoholic beverages for their own consumption.

In addition, there is also a proposal for transferring a set portion of the budget for federal developmental projects to the local bodies and changes in order to tax luxurious real estate and high-value retail transactions not having taxpayers.

Concerning property taxes, the proposals state that the tax rate will be reduced for first-time house purchasers, and will be restored for investors and repeat house purchasers.