Monitoring Desk
ISLAMABAD: Federal Minister for Finance Muhammad Aurangzeb has unveiled a budget of Rs18.877 trillion for the fiscal year 2024-25, a 30% increase over the previous year.
While presenting the budget in National Assembly on Wednesday, Aurangzeb described the budget as balanced, with resources matching expenditures at Rs18.877 trillion.
On the parliament floor, Aurangzeb announced a historic development budget (PSDP) of Rs1.5 trillion. He also declared a 25% salary increase for government employees in grades 1-16 and a 20% increase for those in grades 17-22. Pensions will rise by 15%.
Minimum wages in the private sector will increase to Rs36,000 per month, up from Rs32,000 last year. Funds for the Benazir Income Support Programme will grow by 27% to Rs593 billion for FY25.
The government has also increased income tax rates for salaried individuals in the budget.
Individuals earning Rs50,000 per month will be exempt from income tax. For those earning between Rs600,000 and Rs1.2 million annually, the income tax rate has been set at 5%. This means that individuals earning up to Rs100,000 per month will now pay a monthly tax of Rs2,500, up from Rs1,250.
For annual incomes between Rs1.2 million and Rs2.2 million, the tax rate has been increased to 15%. Thus, individuals with a monthly salary of Rs183,344 will now face a monthly tax of Rs15,000, up from Rs11,667.
Incomes between Rs2.2 million and Rs3.2 million annually will be taxed at 25%. Monthly salaries of Rs267,667 will see their tax rise to Rs35,834, up from Rs28,770.
For those earning between Rs3.2 million and Rs4.1 million annually, the tax rate has been set at 30%. This means that individuals with a monthly salary of Rs341,667 will now pay a monthly tax of Rs53,333, up from Rs47,408.
Meanwhile, an income tax rate of 35% will be applied to annual salaries exceeding Rs4.1 million.
The budget presentation was marked by opposition uproar in the National Assembly.
Aurangzeb expressed gratitude to Prime Minister Shehbaz Sharif, PML-N leader Nawaz Sharif, and other coalition leaders for their guidance in preparing the budget.
“Mr Speaker, despite political and economic challenges, our progress over the past year has been impressive,” Aurangzeb said, urging the nation to revitalise the economy.
He praised the government’s determination in addressing economic challenges and pledged to accelerate development under Shehbaz’s leadership. He highlighted a homegrown agenda that has navigated economic difficulties and stimulated development.
Aurangzeb acknowledged hurdles such as depleted foreign reserves, a 40% rupee depreciation, stagnant growth, and soaring inflation pushing citizens below the poverty line.
He credited the previous PDM government for securing a crucial nine-month IMF programme in June 2023, which averted economic collapse.
“The previous IMF programme was ending, and a new deal was essential to prevent a default. I commend Shehbaz Sharif’s government for their efforts,” he said.
