Pakistan Market – Selected Budget Changes

Staff Report

The parliament has passed budget FY25 today with some changes in measures announced in Budget speech of Jun 12, 2024.

Below mentioned are are some key takeaways from the proposed changes in measures mentioned in amendment document and announced by Finance Minister.Finance minister assures PBC to consider recommendations in Budget

Here are some key takeaways from the proposed changes in measures mentioned in amendment document and announced by Finance Minister.

Tax on hybrid Vehicles: The reduced rate of 8.5% and 12.75% for hybrid vehicles with engine capacity of up to 1800cc and between 1801-2500cc, respectively will continue. However, proposed amendments has limited this benefit till Jun 30, 2026.

FED on cement increased to Rs4/kg: In a unexpected move, where, per news reports were quoting possible reversion of increase in FED on cement, the Finance Minister has proposed to further increase FED on cement from Rs3 per Kg to Rs4 per Kg.

One year Extension to FATA PATA on sales tax: Government has extended sales tax benefits given to FATA PATA for one more year till 30th June, 2025.

Exporters will pay normal corporate tax instead of 1%: Government has maintained its earlier stance of taxing export income at corporate tax of 29% + applicable super tax. Previously, exporter were paying 1% of export turnover which was full and final.

Please refer to our detailed budget report released on Jun 13, 2024 titled as “Pakistan Federal Budget FY25- Getting one step closer to secure new IMF program” for more details.