ISLAMABAD: The National Assembly on Friday passed the tax bill for the government’s next fiscal year, ahead of more talks on a new International Monetary Fund (IMF) bailout that seeks to prevent a debt default for the sluggish economy. In South Asia.
The government unveiled the tax-laden budget two weeks ago, drawing sharp criticism from opposition parties, particularly the PTI, and its coalition partner PPP.
Finance Minister Muhammad Aurangzeb moved the finance bill in parliament, which was opened for amendment and debate by Prime Minister Shehbaz Sharif and the ruling coalition led by the opposition.
Opposition parties, especially MPs backed by now-jailed former prime minister Imran Khan, rejected the budget, citing high inflation.
The DHP, which boycotted Tuesday’s budget debate, said it would vote for the finance bill despite some reservations.
Addressing a press conference after the party meeting, PPP leader Naveed Qamar said the meeting had decided to “dissolve the government and create instability in the country” if the party does not vote for the budget.
The Chamber said that the government now has the numbers and this budget will be implemented.
Apart from the PPP, members of the ruling coalition Muttahida Qaumi Movement-Pakistan (MQM-P) also expressed concern over the government’s move to exempt the salaried and middle class and said the budget would lead to more. inflation in the country.
Parliament Speaker Sardar Ayaz Sadyk said he would air the bill live.
In the national budget presented on July 12, policymakers set a target of 13 trillion rupees in tax revenue for the fiscal year starting July 1, with HPG bolstering its case for a new bailout deal.
Pakistan is in talks with HPG for a loan of between $6 billion and $8 billion.
The tax target increase consists of 48 percent direct tax increase and 35 percent indirect tax increase from this year’s revised estimate. non-tax revenues, including oil tax, rose 64 percent.
Taxes on textiles and leather goods, as well as mobile phones, will increase by 18 percent, in addition to an increase in real estate income tax.
Workers will also receive more direct taxes on income.
The government expects the fiscal deficit to narrow to 5.9 percent of GDP for the new fiscal year, down from an estimated increase of 7.4 percent for this year.
The central bank also warned of possible inflationary effects from the budget, which means that limited progress in structural reforms to broaden the tax base must come from tax increases.
The growth target for next year is set at 3.6 percent, with inflation forecast at 12 percent.
