The government will end GST exemption on 7,000 items

Islamabad:

The federal government has decided to end large-scale tax breaks in the upcoming federal budget for the financial year 2024-25.

This includes ending GST exemptions on about 7,000 items, as well as removing exemptions and concessions for income tax and customs duties. The volume of tax exemptions will be reduced.

The National Economic Survey 2024-25, released on Tuesday, revealed important information about tax breaks.

The survey showed that tax exemptions of Rs 3,979 billion were granted in the current financial year. These exemptions were granted in the areas of income tax, sales tax and customs duties.

However, it is important to note that the annual cost of tax losses due to various exemptions has risen to a record Rs 3.9 trillion in the current financial year, a 73% increase over last year, making it a contentious issue in the ongoing negotiations between Pakistan and Pakistan. the International Monetary Fund (IMF).

Reading: The IMF proposes the revival of the 18% VAT on gasoline

The Pakistan Economic Survey 2024, released by Finance Minister Muhammad Aurangzeb on May 11, revealed that despite multiple rounds of withdrawal of tax credits and exemptions, the amount continues to rise annually.

These tax exemptions, which have been approved over the years, are protected by applicable tax laws.

Losses on reductions in tax liabilities came in at Rs 4.43 billion, lower than the previous year. Exemptions from “special provisions” cost another Rs62 billion, also lower than last year.

Income tax exemptions availed by the government increased by 111% to Rs 57 billion. These exemptions also benefited high court judges, the President of Pakistan, military generals, federal bureaucrats, pensioners and military establishments.

Customs duty exemptions cost Rs 543 billion, up from Rs 522 billion in the previous year, an increase of 4%.