In the latest fiscal developments, Pakistan's government has introduced several new tax measures as part of the Budget 2024-25. These changes aim to increase revenue and secure a bailout package from the International Monetary Fund (IMF).
Withholding Tax on Cash Withdrawals: The government plans to increase the withholding tax on cash withdrawals from banks for non-filers from 0.6% to 0.9%. This means that for every Rs100,000 withdrawn, non-filers will be charged Rs900 starting from July 1, 2024 (Pakistan Observer).
Income Tax for Salaried Individuals: The new budget imposes a higher income tax rate for salaried individuals, with rates going up to 35% for higher income brackets. This adjustment is part of the government's strategy to broaden the tax base and increase tax collection (Pakistan Observer).
Corporate and Property Taxes: Corporate tax rates and property transaction taxes have also seen revisions. The income of exporters, previously subject to a turnover tax, will now be taxed at the corporate rate of 29% plus applicable super tax. Additionally, the Federal Board of Revenue (FBR) has announced new property rates with higher taxes effective from July 2024 (Daily Pakistan Global) (Pakistan Observer).
Tax on Digital Services: The government has introduced new taxes on digital services, including a tax on Netflix subscriptions processed through banks, reflecting an effort to tap into the digital economy for additional revenue (Pakistan Observer).
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