Preface
The budget brief includes the words “Use of AI will supplement this initiative as FBR automates its processes. A compliance risk management system is also being introduced to ensure compliance to tax laws.” However, zero consideration has been given to how this AI will be implemented and how the people who are going to use this risk management system will ensured to be free from any conflict of interest or be impartial.
Like previous years, focus has been increasing on tax burden instead of widening the tax net. There is zero talk about how to capture disproportionate increase of wealth among the masses and focus has been on increase in tax on income. With non-stop increase in inflation, disruption in economic stability, this budget is a futile and unrealistic attempt to meet external and internal demands.
Salient Features
Focus on:
Economic stability and growth through fiscal consolidation and efficient use of public money
Bringing public debt to GDP ratio to sustainable levels
Strengthening policy framework for revitalizing the private sector, fostering entrepreneurship, encouraging investment, and promoting innovation to stimulate economic growth.
Improving service delivery/public goods by funneling more funds into PSDP, introducing sector specific reforms and encouraging innovation.
Integrating green and gender responsive budgeting into public finance management.
Highlights
Income tax
Increase in taxation on salaried and business individuals / AOPs
Increase in advance tax on non-filers
Increase in advance tax on sale / purchase / transfer of immovable property
Increase in advance tax on purchase of motor vehicles
Export sector to be shifted to minimum taxation regime with another 1% to be collected as advance tax
Sales Tax
Stationery items, milk, tractors now subject to sales tax at the rate of 10%
Increased powers for FBR personnel to label transactions as tax fraud increasing burden on taxpayers to defend themselves
LPG import and supply subject to standard sales tax @ 18%
Mobiles phones to be taxed at 18% sales tax rate if value not exceeding 500 USD. 500 USD and above to be taxed at 25%
Petroleum levy
Petroleum levy increased from PKR 60 to 80 on diesel and gasoline products
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