Islamabad:
Finance Minister Muhammad Aurangzeb warned on Wednesday that the government may be forced to introduce up to RS500 billion worth more new taxes if the National Assembly does not allow it to ban financial transactions from unjustified persons.
The minister also made a paradoxical commentary in which he defended the decision to keep the smallest monthly salary unchanged at RS37,000, but advocated an annual increase in wages for parliamentarians to adapt to inflation.
The warning of a mini-budget before the approval of the new budget came only a day after the Minister of Finance proposed about RS432 billion worth new taxes that targeted the digital economy, solar cell panels, middlemen’s cars and fuel, including what was used in agriculture.
He made the comments during a press conference after the budget, expanding the federal budget proposed for the new financial year.
If the law of banning financial transactions has not been adopted and the enforcement measures are not implemented, we will need to introduce RS400 billion to RS500 billion worth of new taxes repeated by the finance minister twice to register his point.
“We have two ways – either we secure enforcement or we are introducing additional measures of up to RS400 billion to RS500 billion.
He said the International Monetary Foundation has accepted the government’s point of view that it can gain RS389 billion further in the next financial year through enforcement measures, which is not possible without new legislation.
Transactions to be banned
In the budget, the government has proposed restrictions on financial transactions from unjustified persons who lack sufficient financial resources. These restrictions include: a ban on reservation, purchasing or registration of motor vehicles; a prohibition on registration, registration or certification of the transfer of real estate; a ban on the sale of securities – including debt papers or mutual fund units – to non -eligible persons; and a ban on opening or maintenance of current, savings or investor portfolio’s securities.
Only persons who have 130% of the value in cash and equivalent asset-encompassing local or foreign currency, fair value of gold, net realizable value of shares, bonds, receivables or any other cash equivalent asset-are entitled to buy such assets.
RS37,000 minimum wage appropriate
In a surprising statement, the Finance Minister defended the decision to freeze minimum wages to RS37,000 per year. Month – or RS1,423 per Day, exclusive holidays.
“Go to the industries and get their feedback on minimum wage. I think we’re in a good place,” Aurangzeb said.
However, he also defended the significant increase in the salary chairman’s and deputy and deputy chairman’s chairman, and the National Assembly’s Speeches and Vice President raised Sixfold to RS1.3 million per year. Month.
He said their wages were adjusted after nine years. Just as the annual increase in the state’s employee salaries, parliamentarians should also increase, he recommended.
Media Protests for his rights
At the beginning of the press conference, journalists expressed concerns about not receiving a technical briefing from the Federal Board of Revenue (FBR) on Finance Bill 2025 on Tuesday. They went out in protest and only returned after Information Minister Attaullah Tarar and FBR chairman Rashid Langrial acknowledged that such orientation should have been given in accordance with tradition.
Finance Minister Aurangzeb later recognized the “concern” caused by journalists and said he “regretted if there was anything”.
Cash at the delivery difference
Government’s steps to charge 2% tax on online shopping up to the RS20,000-MEN it only charges 0.25% for purchases that exceed this amount-will probably be further encouraging cash-on delivery to high value transactions.
Dr. Najeeb, FBR membership policy, explained that although the value of goods in such transactions is high, the profit margins are low, and thus the proposed lower tax rate of 0.25%.
According to the proposed rates, Tax on an RS20,000 transaction will constitute RS400, but for RS21,000 it falls to RS52.
Dr. Najeeb noted that grocery goods have lower margins but are taxed at higher rates than electrical goods. “We did not follow previous policies where everyone suffered from the same category,” he added.
Pakistan’s East Asia -moment
Finance Minister Aurangzeb claimed that reduction of import tasks would move Pakistan against an export -led economy. He emphasized the importance of customs reforms according to national customs policy.
“People ask us if the revenue will fall. But if we are to take this country forward against an export -led model, this is the discussion we need,” he said.
The Minister noted that additional customs customs were removed from four customs lines and reduced to 2,700 more, all linked to raw materials intended to benefit exporters.
“This is an East Asia moment for Pakistan. Whatever was available in fiscal policy reflects travel direction. We have tried to reduce customs. This is not the possible end state,” he noted.
At the increased tax rate for the sale of land, Aurangzeb said the selling page is still receiving capital gains, but the purchase side must receive some relief.
Financial Secretary Imdad Ullah Bosal stated that there was no more fiscal space to reduce spending and savings from the degradation of the government were limited to the abolition of unemployed attitudes.
Answer to a question of delimiting population statistics from the National Finance Commission (NFC) prize, insisted Aurangzeb: “Everything will be done in consultation with provinces.”
Earlier this week, the Minister of Finance had said the population should be relieved from the NFC formula to address 2.6% annual population growth.
“Nothing will be done without the provinces, including the national financial pact,” he added.
To a question about the impact of reducing income tax to 1%, which still leaves it by 9%, on brain drains, Aurangzeb said the government had set a rare direction where an indicates that “all that goes up is within a year to go down”.
“The things that had never been reversed before have now been put in turn – but that’s not the possible end state,” he said.
He clarified that the government is trying to send a message to sectors facing unnecessary burden, especially the formal sector that it is “serious.” “This is just signaling from my perspective in the right direction,” he said.
When asked about the rationale for introducing a VAT of 18% on imported solar panels, FBR chairman Rashid Langrial explained that panels were imported either fully or partially.
Those who added value locally were already taxed by 18%, while fully overall imports were not, which put local collectors in a disadvantage.
“We also closed the door to the future local assembly, so this was not an option. We have to create equal conditions,” Langrial said, claiming that incentives were no longer needed considering the falling costs of technology.
He estimated that the 18% tax on the import of the solar panel would increase the repayment period by only two months from 18 to 20 months.
Acquaintance to Eurobond
When repaying bonds, the Finance Minister said the first rate of $ 500 million values of Eurobonds is expected in September, followed by the next in March. “We are prepared and willing to pay,” he said.
“With the international credit rating that is improving, we want to access the euro and US dollar markets, which are expected in 2026, but certainly not this calendar year,” Aurangzeb added.
