Public Outcry Prompts Govt to Reconsider Tax Rates: on Salaries, Exporters, and Baby Milk
ISLAMABAD: Amid widespread criticism and backlash from various sectors, the government has initiated a consultation process to reconsider proposed tax revisions affecting salaried individuals, exporters, and the sale of baby milk.
The internal consultation comes in response to mounting concerns over the government’s plan to generate an additional revenue of Rs 1.5 trillion. However, the outcome of these discussions hinges on the country’s financial capacity and the approval of the International Monetary Fund (IMF).
Critics argue that the government’s heavy reliance on taxation, rather than exploring alternative measures such as reducing expenditure, reflects a concerning trend. Despite facing pressure to alleviate the tax burden on the salaried class and exporters, the government remains steadfast in its pursuit of additional revenue.
Finance Minister Muhammad Aurangzeb has reportedly raised concerns regarding the taxation of the salaried class with Prime Minister Shahbaz Sharif. Despite significant contributions amounting to Rs 360 billion this year, salaried individuals face the prospect of an additional tax burden of Rs 75 billion in the upcoming fiscal year.
Meanwhile, exporters are grappling with the proposed shift from a fixed income tax rate to a gradual increase, prompting concerns about the potential impact on their businesses.
The Standing Committee on Finance, led by Senator Saleem Mandviwala, has vowed to oppose these tax measures, emphasizing the need to protect the interests of salaried individuals and exporters. Additionally, the committee has recommended a review of the proposal to impose an 18% sales tax on baby milk.
Pakistan Maintains Standard Sales Tax Rate at 18% in 2024-25 Budget
In response to public outcry, Chairman FBR Malik Amjad Zubair Towana has expressed willingness to discuss the possibility of reducing the proposed 18% sales tax on baby milk, suggesting a phased implementation instead.
Sheikh Waqar Ahmad, Head of External Affairs at Nestlé Pakistan, has highlighted concerns over the potential impact of tax revisions on the price of baby milk, urging gradual adjustments to mitigate disruption for consumers.
The Standing Committee has also approved budget proposals to address Pakistan International Airlines’ deficit over the next decade, sparking debate over potential hidden incentives for buyers and objections regarding special exemptions.
Additionally, the committee has endorsed the government’s proposal to restrict non-filers from traveling abroad, albeit with clarification that this measure applies only to individuals issued notices for filing annual returns.
However, objections have been raised against the introduction of a new category for late filing of income tax returns, with critics arguing that it further complicates the tax system and restricts options for non-filers.
As discussions continue, the government faces mounting pressure to strike a balance between revenue generation and addressing public concerns over taxation policies.
