The federal government has tried to make some changes to the Finance Bill 2024 to provide some concessions to the masses. On the contrary, the IMF did not allow any of the relief proposals.
The suggestion from the finance department is to put a fixed income tax rate on all export proceedings by increasing the tax rate from 1% to 2–3%.. The IMF rejected the suggestion and asked to retain the same tax policy for all income holders, together with the exporters.
The government proposed to cut the GST on stationary, textbooks, and other related products. The IMF allows to withdraw GST from textbooks only. All the other products will be subject to 18% sales tax. IMF agreed to cut Federal Excise Duty (FED) on cement and a few technical subsidiaries.
The government tried to reduce the tax burden by curtailing expenditures of the Public Sector Development Program (PSDP) and faced the objection of the IMF.
Other proposed amendments, like an increase in FED on international air tickets, property and tax for salaried and non-salaried persons, the minimum tax rate to be fixed at 1% of export proceedings, and a reduction in GST for FATA, were all not approved by the IMF.
Now the government will present the finalized bill to the National Assembly this week.
