Tax-ridden budget: minimum wages raised to Rs36,000, salaries up by 25pc

Inflation target set at 12pc for next fiscal year. Minister says inflation is decreasing due to govt's pragmatic policies.

ISLAMABAD: Finance Minister Aurangzeb Khan on Wednesday presented the federal budget of Rs18.8 trillion for the fiscal year 2024-25 in the National Assembly amid rumpus and sloganeering by the opposition members.

Before the start of the assembly session, the federal cabinet at a meeting chaired by Prime Minister Shehbaz Sharif approved the budget.

Inflation target set at 12pc for next fiscal year. Inflation that had increased to over 40pc is decreasing fast due to govt’s pragmatic policies.

The minister said that the government has approved to raise the minimum wage from the current Rs32,000 to Rs36,000.

Salaries of government employees have been increased according to their grades with those from grade one to 16 to get a 25 per cent raise in pays to help them set off the inflation. Officials in grade 17 to 22 have been given a raise of 22pc while pensioners will also get a 22pc increase, said the minister.

The minister also said that a Rs20 levy will be imposed on petrol and diesel, taking it from the previous Rs60 to Rs80, that will jack up the POL prices.

According to the budget documents, an equal sales tax of 18pc will be imposed on all types of mobile phones. Moreover, taxes on vehicles will be charged on the basis of the actual price instead of engine capacity.

Tax relaxation given in 2013 on hybrid and other luxurious electric vehicles has been withdrawn.

There is a proposal to give relaxation on the import of solar panels, invertors and batteries to promote the industry.

The government also decided to increase levy by Rs20 on petrol and diesel, Rs25 on superior kerosene oil, light diesel and high-octane, e-10 gasoline.

According to the budget documents, the government, on the demand of the IMF, increased the tax ratio, for both filers and non-filers in sale and purchase of property.

Under the proposal, filers will have to pay 15pc and non-filers 45pc tax on the sale and purchase of property. Meanwhile, traders said that 15pc tax on real estate will cause the collapse of the sector.

They said that the revenue target set in the budget on the dictation of the IMF was too high considering the productivity of the industrial sector.

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