ISLAMABAD (Turkiye Khabar) – The Senate has approved several important recommendations regarding the upcoming fiscal year's budget, including proposals for salary increases for government employees, public relief measures, and tax incentives for various sectors.
Chairman of the Senate Standing Committee on Finance, Saleem Mandviwalla, presented the budget recommendations in the House. The Senate recommended a 15 percent increase in the salaries of federal government employees and the restoration of frozen medical allowances for employees and pensioners. It also proposed the abolition of the petroleum levy imposed on motorcycle users and the reinstatement of the one percent final tax regime for exporters.
The House recommended relief in electricity and gas tariffs for the industrial sector, reducing advance tax on telecommunication services from 15 percent to 8 percent, and lowering the federal excise duty on beverages to 15 percent. It also approved a recommendation to ensure that sales tax refund payments are made within 72 hours.
The Senate recommended extending tax exemptions for information technology exporters and freelancers for another 10 years and proposed issuing tax exemption certificates to IT-related organizations.
The recommendations also include imposing a 20 percent customs duty and a 4 percent additional duty on the import of solar energy storage equipment, increasing the budget for universities to Rs130 billion and raising it to Rs190 billion by 2030. Additional funding was also recommended for public hospitals, primary healthcare, higher education, and scholarships.
The House proposed higher taxes on large luxury vehicles, high-value properties, and non-productive assets, while recommending the development of an effective mechanism for directly transferring a fixed portion of development funds to elected local government institutions.
The Senate proposed abolishing sales tax on food items, medicines, educational supplies, children's essential goods, and hygiene-related products. It also recommended increasing taxes on imported luxury items, expensive mobile phones, luxury watches, perfumes, jewelry, and other non-essential imported products.
Similarly, it proposed increasing various duties on large imported luxury vehicles and sports utility vehicles, while recommending reductions in taxes and fees for first-time car buyers, used vehicles, and locally manufactured small cars.
The Senate further recommended exempting medicines used for the treatment of cancer, heart diseases, kidney ailments, diabetes, thalassemia, and hepatitis from customs duty. It also proposed exempting modern agricultural irrigation systems and solar-powered agricultural equipment from sales tax and customs duties.
The budget recommendations additionally include limiting increases in the petroleum levy beyond a specified threshold, reducing sales tax on educational stationery to zero, and providing tax exemptions for low-income digital content creators.