- The IMF can insist on taxing retirees to obtain RS0.1 m / month.
- The world loan team is expected to visit Pakistan on May 16.
- The poultry association says that the tax by Poussin is too high for the industry.
Islamabad: The Federal Board of Return (FBR) suggested imposing retirees in the next 2025-2026 budget, just before the planned visit to the International Monetary Fund (IMF) in the country, The news reported Tuesday.
The revenue committee is thinking about the increase in the exemption from the taxable ceiling for the salaried class of 0.6 million rupees to Rs1 at 1.2 million per year.
On May 16, the IMF team was likely to go to Pakistan to talk about the upcoming budget. Among other things, the discussion will include objectives for tax and non -tax income as well as expenses to maintain the main surplus and the budget deficit in predetermined ranges.
With regard to retirees, an FBR official told the scribe that many ideas were taken into account and will be presented to the IMF mission. Taxing retirees who receive between 0.2 million rupees and 0.4 million pension rupees per month is one of the proposals. Taxing retirees who draw more than RS0.1 million is also one of the proposals, however, it may not be implemented.
To promote justice in the tax system, the IMF can insist on taxing retirees who receive 100,000 rupees per month at the rate of 2 to 5%.
“Another proposal under study is to increase the exemption limit of the taxable ceiling from RS0.6 million per year to RS1 or RS1.2 million per year,” said the most of income has been received by the FBR of the middle class. Consequently, the reduction in rate between 5% and 10% has been suggested. Higher wages of RS 10 million per month are subject to an overload of 10%, which can be canceled. The upcoming budget can also rationalize the super tax.
Representatives of various professional associations were interviewed by the Senate Committee on Finance and Revenues to discuss the proposals of the next budget. A meeting of the standing organization of the Senate was chaired by Senator Saleem Mandviwalla here.
Representatives of the poultry association said that the tax by Poussin was too high for industry. They demanded the removal of the sales tax on the chicken, noting that if other meats were exempt, the chicken was taxed when sold under brand packaging.
They said that the government forced them to abandon the brand and the addition of value. They asked for a reduction in the sales tax on dairy products, in particular packaged milk, from 18% to 5%. They stressed that milk was generally not taxed in the world and urged the government to align itself with international best practices. In response, the President of the FBR requested concrete proposals to compensate for the income deficit which would result from such a tax reduction.
Similarly, the representative of the Juices Council fruit, Atika Mir, recommended a reduction in federal excise duties (Fed) from 20% to 15%, citing a 40% drop in sales in the past two years due to the current tax structure.
In addition, the president of Pakistan Textile Mills Association (Aptma), Kamran Arshad, warned that textile exports had remained stagnant for two years.
He criticized the EFS program to push the industry towards collapse, highlighting questions such as the taxation of 18% sales tax on local cotton and franchise imports of foreign cotton rights. He recommended to place the wire and fabric on the negative list, the fixing of electricity rates to 9 cents per unit and the reduction in the early tax rate from 2.5% to 1%.
The association has indicated that 120 spinning factories and 800 factories in an interest had already closed and that textile exports had remained stagnant at 16.5% and 16.7% in the past two years. In addition, Pakistan Builders and Developers Association (ABAD) proposed the elimination of prior income tax on purchases and investment of goods. They also called for the reintegration of a simplified tax collection system based on the covered area and asked for the repeal of section 7th, declaring that plots were a fundamental need for ordinary citizens.
However, the association of Pakistan manufacturers has requested a reduction in the tax rate of the deduction from 8% to 1.5% or 2%, arguing that the current rate creates serious constraints for the stability of the sector. They also required the abolition of the term “reservoir” for entrepreneurs, arguing that construction is a mobile industry requiring frequent cash payments to small suppliers and workers in various regions, which makes it impassable to fulfill the obligations of restraint to agents.
The Steel Melters Association has raised concerns concerning tax evasion in the steel sector, which they estimated at 70 to 80 billion rupees per year. They highlighted the smuggling and crawling traffic from 3 to 4 million tonnes of steel scrap not recorded in Karachi, including imports from Iran.
Exempting a taxable ceiling from RS0.6 m to Rs1 at 1.2 m per year in consideration; The poultry association is looking for the withdrawal of the sales tax; JUIES COUNCIL FRUIT looking for 20-15pc cut in fed; Aptma calls to place the wire, the fabric on the negative list, the fixing of electricity rates to 9 cents per unit, reducing the early tax rate of 2.5-1PC; The Ministry of Finance mentions the areas requiring changes to fill the legal, administrative and application urgent gaps; Tax laws (fine) ord. addresses important gaps in the tax system;
In a related development, the global rating agency Moody’s said that climbing tensions between India and Pakistan would weigh the economic growth of Pakistan. The rating agency said: “A sustained escalation of tensions with India would probably weigh Pakistan’s growth and hinder continuous budgetary consolidation of the government, which writes Pakistan’s progress in the realization of macroeconomic stability.”
On Pakistan’s economic trajectory, he said that his macroeconomic indicators improved, growth gradually increasing, the relaxation of inflationary pressure and exchange reserves increasing in the midst of “continuous progress” in the International Monetary Fund (IMF) program.
However, the agency noted that “a persistent increase in tensions could also affect Pakistan’s access to external funding and put pressure on its exchange reserves, which are well below what is necessary to meet its external needs for debt payment for the next few years”. In particular, the agency warned that the suspension of India from the 1960s water Treaty could “seriously reduce the water supply of Pakistan”.
In comparison, Moody’s said that macroeconomic conditions in India would remain stable, propelled by “moderate growth levels but always raised in a strong public investment and healthy private consumption”.
“In a climbing scenario supported in localized tensions, we do not expect major disruptions to India’s economic activity because it has a minimum of economic relations with Pakistan,” he said, adding that the country represented less than 0.5% of India’s total exports in 2024. However, he stressed that higher defense expenses could have an impact on ” slow to the tax consolidation of India ”.
“Our geopolitical risk assessment for Pakistan and India explains persistent tensions, which have sometimes led to limited military responses,” he said. He predicted that the pushes “will perform periodically” as they did in the post-independence history of neighboring countries. However, they will not lead to an “pure and simple military conflict,” he added.