Budget 2024-2025

Budget 2024-25

Still, the Budget Strategy Paper (BSP) for the next fiscal year has not been presented in the parliament yet, mainly due to socioeconomic risks associated with the legal status of reserved divisions and political uncertainties caused by the unavailability of the key Senate and National Assembly standing committees, especially those related to finance.

• The finance minister was earlier expected to present the budget for the fiscal year 2024-25 on June 10 that has now been rescheduled for June 12.
• The event to present the Pakistan Economic Survey for the fiscal year 2023-24 is to be held on June 11 while a council meeting is also planned for June 10.
• Mentioning that, the Federal Budget of 2024-25 was in its final stages for Senate approval and pass on the budget estimates by June 26.
• Bearing in mind these facts and due to the pressure from the IMF, the Pakistan government is expecting to do away with the following tax exemptions in the FY2024-25 budget.

With a view to reduce the ever-f sanding fiscal deficit in the country, Pakistan Budget for years 2024-25 has been mooted to pan its plan on doing away with concessions exempted on sales tax and income tax. Also, the government may levy an excise tax on tractors and pesticides – key agricultural inputs, which would inform hiked up prices of these items.

At present, as per section no. 6 (50) of the Sales Tax Act, any pesticide registered in the Department of Plant Protection is outside the defined purview of the Sixth Schedule to be tax-free.

Taxes -Real Estate Properties:

In Pakistan property taxes are collected by the provincial governments and it is calculated by the annual rental value of the property as defined under the Urban Immovable Property Tax Act . Every county has its own tax bracket. The tax could be a onetime amount, or could be charged based on the annual rent to be paid. This value shows how much the government would like to earn from the property if it was rented out in the market. The tax is progressive in manner depending with the province in which the property lies and also whether the property is for use or is a rental property.

Taxes Types in Pakistan:

• Capital Value Tax(CVT)
• Withholding Tax 
• Capital Gain Tax 

Budget 2024-25: Real Estate Property Tax

The new budget of Pakistan government for the financial year 2024-25 greatly affect the real estate sector at this time. The budget also makes the following changes for property taxation: the rates are adjusted upwards for commercial properties; and properties valued over PKR 50 million are to be taxed at a new rate.

Through reviewing the stinginess of the existing tax system, the FBR intends on seeking fairness in the taxation process with regards to the targeted national fiscal policy. These measures would increase property tax revenue and should help fund the 2024-25 budget. The effect of changes in the WITHHOLDING TAX RATES CONCERNING THE REVISED SCHEDULE may differ depending on the following elements. Here are some potential effects:

Impact on Property Prices: Property owners and developers might oppose these tax reforms because the higher tax rates may decrease property prices. This could mean that more buyers are deterred by the new withholding tax hikes, which in turn would slow down the rate at which people are buying real estate, thus requiring sellers to adapt to new pricing structures that can attract the buyers.

Shift in Buyer Behavior: Consumers also consider approaching filers instead of non-filers because filers indulge in tax concessions that are lower than other parties. This preference could affect the market for goods and services, in particular decrease the number of transactions with non-filers.

Increased Tax Revenue: High withholding tax rates are undertaken in a bid to up the government’s revenue collection through taxes. Successful implementation might help the authority to gather high tax revenues for funding developmental activities.

Compliance and Documentation: When these changes are made, other individuals who are not filing could be inclined to do so in order to take advantage of other lower withholding taxes rates. This change might possibly result in improved measures to enhance taxes hence boosting the aspect of documentation on real estate transactions.