Just days before the National Assembly is set to pass over Rs435 billion in new taxes, the government has rolled out an additional Rs36 billion mini-budget — and tweaked some tough spending restrictions that had raised eyebrows among the public.
The fresh measures, revealed on Sunday, mean Pakistanis will now see total new taxes worth about Rs462 billion for the upcoming fiscal year. These include higher taxes on company investments in mutual funds and returns from government debt — and, surprisingly, a new federal excise duty of Rs10 on every one-day-old chick, which is expected to push poultry prices up even more.
The government also backed away from an earlier blanket ban that would have stopped people with low declared assets from making big purchases like cars, homes, or large investments. Now, under the revised plan, people can still buy cars worth up to Rs7 million, or residential property worth up to Rs50 million, without restrictions. Bigger transactions, like buying commercial plots over Rs100 million or holding more than Rs100 million in bank deposits, will still be flagged.
Officials say these thresholds were set because only the wealthiest 5% of Pakistanis tend to hide assets, while the vast majority don’t have the means for huge purchases.
The Federal Board of Revenue (FBR) introduced these tweaks during a meeting of the National Assembly’s finance committee, chaired by PPP’s Syed Naveed Qamar. Finance Minister Muhammad Aurangzeb and FBR Chairman Rashid Langrial defended the new taxes as necessary to cover revenue losses from cutting sales tax on imported solar panels — originally set at 18%, now dropped to 10% after a deal with the PPP.
“This mini-budget will help bridge the gap from tax cuts on solar imports and fund the 10% salary increase for government employees,” said Langrial.
The government had also tried to tax baby chicks last month, but the IMF shot it down, pointing out the contradiction between claiming high food taxes hurt people and then adding new ones. This time, however, the duty made it into the proposal.
Meanwhile, the committee approved raising the tax on company dividends from mutual funds, bumping it from 25% to 29%, and increased withholding tax on profits from government securities to 20% for institutional investors.
These moves come on top of other budget measures like a Rs2.5 per litre carbon levy and higher car engine levies. The FBR’s tax collection target for next year now stands at a hefty Rs14.13 trillion.
Finance Minister Aurangzeb praised opposition lawmakers for a cooperative review of the tax plan, acknowledging PTI’s Arif Mobeen Jutt and Usama Mela for their input.
Despite the new taxes, officials maintain they’re trying to keep the burden balanced. A uniform 10% sales tax will now apply to both imported and local cotton — a long-standing demand from the local textile industry.
