ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday that without broadening tax base, the economy cannot grow.
Addressing the post-budget press conference here, he said the step was taken to end the term “non-filer” as he was unable to understand it. The term is unique to Pakistan, he added.
He explained that tax rate for non-filers, those who do not pay tax, has been raised to force them to pay income tax.
At this stage, journalists stood on their chairs in protest against raise in income tax on salaried class.
He said that income tax exemption for those earning Rs600,000 per annum has been maintained. The maximum tax on salaried class is 35 percent whereas tax rate for professionals in the non-salaried class is 45 percent.
Aurangzeb said that the government aimed to raise tax-to-GDP ratio to 13 percent. Below 10 percent tax-to-GDP ratio is unsustainable. This ratio will be raised in three or four years, he continued.
Clarifying raise in tax, he said the government planned to bring retailers and wholesalers into tax net. It was necessary to share the burden of income tax on salaried class.
He praised the FBR for bringing more retailers and wholesalers into tax net. In April, traders were requested to get themselves registered with the FBR voluntarily and about 31,000 retailers have so far been registered, he added.
He said the undocumented economy is being digitised. Human intervention is reduced by digitising economy, he said and added that the step will help end corruption.
At present, paper currency worth Rs90 trillion is in circulation, he said and added that he wanted to end cash transactions.
For this purpose, the minister said the government would expand the Point of Sale (POS) scheme already continuing in big department store to document cash transactions as much as possible.
It may be recalled that Aurangzeb presented the federal budget 2024-25 yesterday with a total outlay of Rs18.9 trillion. The budget aimed at a modest 3.6 percent GDP growth for the coming fiscal and set an ambitious Rs13 trillion tax collection target raising income tax on salaried class and removing tax exemptions.
Meanwhile, in fiscal year 2024-25 budget the federal government has proposed a substantial allocation of funds for the education and health sectors.
The budget includes significant investments in various educational initiatives. Rs 25.75 billion is set aside for the Federal Ministry of Education, while the Higher Education Commission (HEC) is allocated a development budget of Rs 66.31 billion.
The government is committed to upgrading facilities in 166 public schools in Islamabad, ensuring that students have access to modern educational resources.
Furthermore, Minister Aurangzeb highlighted plans to provide free meals to students in 200 primary schools in Islamabad. An education voucher scheme will be introduced to assist underprivileged students attending private schools.
The government aims to expand the education scholarship program, adding one million more children, bringing the total beneficiaries to 10.4 million.
In the healthcare sector, the budget includes a proposal to construct the Quaid-e-Azam Health Tower at the Pakistan Institute of Medical Sciences (PIMS) in Islamabad. This initiative is part of the government’s broader efforts to enhance healthcare infrastructure and provide better medical services to the public.
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