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‘Non-filers to receive personal hearings before SIM blockage and travel ban’

The government has agreed to include the Senate's suggestion to allow non-filers a personal hearing before implementing measures like SIM card blockage and foreign travel bans, Finance Minister Senator Muhammad Aurangzeb announced on Tuesday.

Wrapping up the budget 2024-25 debate in the National Assembly, the former banker praised the Senate’s recommendations for the upcoming fiscal year’s budget.

In the Finance Bill 2024, the government proposed preventing non-filers from traveling abroad and blocking their SIM cards to incentivize tax compliance, sparking discussions on its feasibility.

He stated that the budget aims to reduce the fiscal deficit by increasing government revenues and cutting unnecessary expenses.

The Pakistan Muslim League-Nawaz (PML-N) led coalition government aims to meet the requirements for an extended International Monetary Fund (IMF) program by setting a high tax revenue target and reducing the fiscal deficit from 7.4% to 5.9%.

Streamlining tax collection and broadening the tax base are seen as key strategies to achieve these goals.

Pakistan has set an ambitious tax revenue target of Rs13 trillion for the year beginning July 1, nearly 40% higher than the current year, to support a new bailout deal with the IMF, aligning with analyst expectations.

Following the prime minister’s directives, the focus on simplicity and austerity will continue into the next fiscal year, the finance minister said.

He mentioned that a committee, led by him, was established to recommend measures including the closure or merger of ministries and their devolution to provinces.

He announced future pension expenditure reductions through pension reforms.

Senator Aurangzeb highlighted that the home-grown reforms program forms the basis of the next year’s budget to navigate the country’s economic challenges.

The reforms include increasing the tax-to-GDP ratio to 13%, state-owned enterprises (SOE) reforms, public-private partnerships, and energy sector reforms.

The minister affirmed the government’s commitment to this plan, noting that its implementation has already begun and all stakeholders will be consulted throughout the process.

He said the digitization of the Federal Board of Revenue (FBR) is being accelerated and new legislation is being introduced in Parliament to reform power sector boards. The privatization of Pakistan International Airlines (PIA) is also progressing, he added.

Other aspects of the home-grown reforms plan include targeted social protection, a broad-based fair taxation system, and initiatives for the health and education sectors, including skills development.

He announced that stationery items will remain tax-exempt and the current reduced rates for hybrid-electric vehicles will stay unchanged.

Under the Export Facilitation Scheme (EFS) 2021 policy, he said, zero-rating for local suppliers is not being abolished.

The finance minister emphasized the prioritization of agriculture, education, and health sectors, and serious consideration of proposals like exempting charity hospitals from sales tax.

He noted that the government is expediting FBR reforms with seven billion rupees allocated in the budget for this purpose.

Action will be taken from July 1st against retailers who fail to register with the FBR Tajir Dost Scheme, he said.

Regarding the defense budget, the finance minister acknowledged the significant sacrifices of the armed forces in defending the country and their readiness to address internal and external threats.

He emphasized that national security is the top priority and assured that the armed forces will receive the necessary resources.

The finance minister announced three months’ basic pay honoraria for various departments, including the staff of the National Assembly, Senate, Press Information Department (PID), Radio Pakistan, Pakistan Television (PTV), and Associated Press of Pakistan (APP), who performed duties in the Parliament House during the budget session.

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