Islamabad, In a comprehensive post-budget news conference today, Finance Minister Muhammad Aurangzeb outlined the upcoming fiscal year’s budget, emphasizing it revolves around five key principles designed to broaden the tax base and digitize the economy.
According to Ministry of Information and Broadcasting, the Finance Minister detailed that the budget aims to implement a progressive income tax regime, eliminate non-filers, and protect low-income groups as part of its core objectives. Aurangzeb pointed out the current tax to GDP ratio of below ten percent as unsustainable, setting a target to raise it to thirteen percent over the next three years.
The new fiscal policies will see the implementation of taxes on retailers and wholesalers starting July 1, with thirty-one thousand retailers already registered under the new system. Aurangzeb highlighted the shift towards end-to-end digitization within the Federal Board of Revenue (FBR) to reduce human intervention and enhance transparency and client service.
He further noted that the affluent should bear a greater tax burden, which aligns with the progressive tax measures being introduced. Additionally, enhanced taxes on business transactions for non-filers are part of the strategy to phase them out entirely.
In response to inquiries about sector-specific allocations, Aurangzeb revealed that record funding has been allocated to the IT sector to boost IT exports and support youth startups. He also confirmed that financing from banks for Small and Medium Enterprises (SMEs), IT, and agriculture sectors has been revitalized.
Regarding public sector investments, 81 percent of the Public Sector Development Programme’s budget has been allocated to ongoing projects, with the remainder earmarked for new initiatives. The minister also mentioned that consultations are ongoing with all stakeholders, including allied parties, on the privatization process, with plans to complete the privatization of PIA and outsourcing of Islamabad Airport by August, followed by Lahore and Karachi airports.
Additionally, the Minister of State for Finance, Ali Pervaiz Malik, addressed relief measures, stating that significant funds have been allocated under the Benazir Income Support Programme and for power subsidies, especially for consumers using up to 200 units. He also noted that additional resources have been reserved for the Utility Stores Corporation to offer essential items at subsidized rates to the needy.
Malik confirmed that there will be no tax for employees earning up to fifty thousand rupees, ensuring relief for lower-income earners.