ISLAMABAD:Finance Minister Muhammad Aurangzeb on Monday formally unveiled a Rs36 billion mini budget in the National Assembly and announced to exclude almost the entire population from disclosing source of income before buying a big home, a car or running a bank account.
The limits set for disclosing the source of income before making big purchases would now target only the users of above 1,600 cc cars, and people owning more than one-kanal residential houses in major cities and almost two-kanal houses in other cities.
Effectively, this has rendered the enforcement initiative of the Federal Board of Revenue (FBR) chairman ineffective, which has also lowered the success rate to catch the tax evaders to just 3.7%.The FBR does not have the capacity to go after the people once they have made these purchases, thus, the government had planned to pre-empt the purchases.
Aurangzeb made these announcements while winding up the budget debate in the National Assembly. With the winding up speech, the formal process for approval of the next fiscal year’s budget and tax measures has begun that will end with the approval of the Finance Act likely on Thursday.
The finance minister presented three more budget proposals before the National Assembly, which also target one-day old chicks, to generate a total Rs36 billion in additional taxes in the fiscal year 2025-26.
He proposed increase in the tax rate on the income derived from the debt portion of mutual funds issued to companies from 25% to 29%. The minister said that the companies’ other incomes were already taxed at the 29% rate.
Aurangzeb said that the income tax rate on profits made by corporations and companies on investments in government debt is also increased from 15% to 20%. The government has also proposed tax on the poultry sector, where billions of rupees investments are made, said Aurangzeb.
“It is proposed that a Federal Excise Duty (FED) of Rs10 per day-old chick should be imposed on hatchery chicks, so that this sector can also contribute to the national exchequer,” he said. The government has estimated that about 1.5 billion chicks are produced every year and it will collect Rs15 billion by taxing a product that is a common diet of the poor and the rich.
