Budget 2024-25: Govt likely to revise tax slabs for high-paid employees

Direct taxes are expected to increase by Rs3.45 trillion, customs duties by Rs267 billion

ISLAMABAD:

The upcoming federal budget for 2024-25 is expected to see tax hikes and the removal of unnecessary exemptions, including a sales tax on petroleum products and revised income tax slabs for high-paid employees.

According to documents, Rs2.1 trillion is allocated for defence and Rs9.7 trillion for debt servicing. Development projects will receive Rs1.5 trillion, the energy sector Rs253 billion, and infrastructure Rs827 billion.

The budget includes Rs800 billion in energy subsidies, Rs206 billion for water resources, and Rs279 billion for transport and communications. The GDP growth target is 3.6%, with the FBR tasked to collect Rs12.97 trillion in taxes, up by Rs3.72 trillion from this year. Direct taxes are expected to increase by Rs3.45 trillion, and customs duties by Rs267 billion.

Inland revenue taxes are projected at Rs11.37 trillion, with direct taxes at Rs5.51 trillion. New tax measures are expected, including phasing out sales tax exemptions on petroleum products.

A 5% sales tax on petroleum products and higher taxes on cigarettes and nicotine pouches are likely.

The proposed removal of tax exemptions includes books, markers, stationery, and branded milk. Local and imported vehicles may become more expensive.

The budget will also target non-filers with increased taxes on bank cash withdrawals. Higher tax rates on imported food items and luxury goods are expected. Income tax slabs for high-paid employees may also be revised.

Finance Czar Muhammad Aurangzeb is set to unveil the Rs18 trillion federal budget for the fiscal year 2024-25 in the National Assembly on Wednesday (today), which would focus on fiscal consolidation to contain the budget deficit, official sources said on Tuesday.