Consultations are ongoing with the IMF on tax proposals for the new fiscal year’s budget. As reported by national media on Saturday, the new budget includes a proposal to reduce taxes on vehicles and their locally manufactured parts.
According to details, the existing 2% additional customs duty on some parts is proposed to be eliminated. A gradual reduction is also proposed for the tax slab ranging from 4% to 7%. There is a proposal to reduce the current 15% to 90% regulatory duty on vehicles by 20% annually.
As reported by Samaa, citing sources, a 0.5% reduction in the withholding tax on property transactions is expected. Tax collection on agricultural income will begin on July 1, 2025, with provincial assemblies having already completed the necessary legislation.
In the new budget, there is a plan to gradually reduce taxes on industrial raw materials and semi-finished goods to increase national exports by $5 billion over the next five years. This includes the textile, chemical, auto parts, plastics, iron, and steel industries.
Sources suggest that the FBR’s tax target for next year is proposed to be set at 14,305 billion rupees. An estimated 600 billion rupees will be generated through enforcement of tax laws, and over 400 billion rupees through new measures. Additional revenue is also expected from court rulings related to tax revenue.
The IMF has emphasized bringing traders into the tax net and specifically called for effective implementation of systems such as tobacco, beverages, point of sale, and track and trace.
