The government will present the budget 2024 with one eye on precarious economic conditions and the other on the 24th ‘longer and larger’ bailout program of the International Monetary Fund (IMF).
According to sources, the initial estimate for expenditures on interest and loans is Rs 9,700 billion, while the initial estimate for subsidies is Rs 1,500 billion.
Sources said that the estimate for tax revenue is over Rs 11,000 billion, with direct taxes expected to contribute Rs 5,300 billion and federal excise duty expected to contribute Rs 680 billion.
Sales tax is likely to generate over Rs 3,850 billion, while customs duty is expected to generate over Rs 1,100 billion, sources said.
The initial estimate for non-tax revenue is Rs 2,100 billion, with the petroleum levy expected to generate Rs 1,100 billion. The federal budget deficit is expected to be around Rs 9,300 billion, sources added.
The government is taking measures to control inflation, with a target to bring it down to 5-7% by September 2025.
For the upcoming budget, a 10-12 percent increase in salaries is expected, but the final decision will be made by the government after reviewing the Ministry of Finance’s recommendations.
Earlier, sources said that the Pakistan government will likely end tax exemptions in the FY2024-25 budget on IMF’s demand.
The government is also considering imposing a sales tax on tractors and pesticides, potentially leading to price hikes for these essential agricultural products.