In the forthcoming fiscal year 2024-25, the federal budget proposal includes a significant tax increase on imported mobile phones, as disclosed by sources. According to insiders at the Federal Board of Revenue (FBR), there are plans to escalate the Pakistan Telecommunication Authority (PTA) cess and Federal Excise Duty (FED) alongside a proposed augmentation of the Goods and Services Tax (GST) on imported mobile devices.
The proposition entails a notable rise in the GST on imported mobile phones, as highlighted in the finance bill. However, it’s worth noting that implementing additional GST might encounter hurdles, given the existing 25% GST rate.
Anticipation looms over the fiscal objectives the government aims to unveil in the budget presentation scheduled for Wednesday. Analysts speculate that the government’s objective is to craft a budget that not only fortifies Pakistan’s standing but also bolsters its plea for a new financial assistance package from the International Monetary Fund (IMF).
Pakistan’s ongoing negotiations with the IMF revolve around securing a loan estimated between $6 billion to $8 billion, crucial for averting an economic crisis. Last summer, Pakistan narrowly escaped a default, courtesy of a short-term IMF bailout amounting to $3 billion over nine months.
While the country has managed to rein in its fiscal and external deficits, this came at the cost of subdued growth and industrial activity, coupled with soaring inflation rates. Inflation averaged nearly 30% in the last financial year and 24.52% over the preceding 11 months.
The upcoming year sets a more ambitious growth target at 3.6%, a considerable leap from the current 2% projection and the economic contraction witnessed last year. Prime Minister Shehbaz Sharif’s administration, inaugurated post-February elections, has pledged to undertake rigorous reforms. However, persistent challenges such as escalating prices, unemployment, and a dearth of new job opportunities pose significant political challenges.
Sources reveal that the federal government has devised a comprehensive five-year plan spanning from 2024 to 2029, encompassing critical economic objectives. This macroeconomic blueprint, slated for approval in the next fiscal year’s budget, addresses pivotal areas including energy, balance of payments, development budget, food and agriculture, population, poverty, and governance reforms, as per The News report.
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