Finance Minister Muhammad Aurangzeb has unveiled his first federal budget, presenting a comprehensive outlay of Rs18.9 trillion for the fiscal year 2024-25. The budget includes significant tax hikes on various goods, including petroleum products, cigarettes, and branded clothing and shoes.
The Federal Board of Revenue (FBR) aims to collect Rs12,970 billion in taxes, marking a 38% increase from the current fiscal year. This ambitious target is supported by several new tax measures and increased rates. To combat the sale of counterfeit cigarettes, the federal government plans to seal illicit factories.
Additionally, a new tax of Rs44,000 will be imposed on materials used in cigarette filter production. This move aims to curb the production and sale of unauthorized cigarettes. A 5% tax will now be levied on the acquisition of new plots, residential, and commercial properties.
In a notable shift, advance tax on vehicle registration will be based on the vehicle’s price rather than its engine capacity. This change is expected to more accurately reflect the market value of vehicles. To bolster the Goods and Services Tax (GST) on textile products, the government has introduced an 18% sales tax on branded shoes and apparel.
This measure aims to increase revenue from the high-demand fashion sector. The advance withholding tax for non-filer retailers and wholesalers will increase from 1% to 2.25%.
This hike is part of the government’s efforts to encourage tax compliance and increase.
