Budget 2024-25: Govt decides to withdraw tax exemption on over 7000 items

The government is all set to unveil the federal budget 2024-25 today (Wednesday) with the addition of fresh taxes and eliminating exemptions on hundreds of thousands of items. 

According to the sources, the government’s bigwig decided to eliminate tax exemptions from over 7,000 items, most of them were being sold with general sales tax (GST), in a pre-budget meeting.

Sources added that it was also decided in the meeting that income and customs tax exemptions will be ended in the upcoming budget, while exemptions on some goods will be reduced from the current volume. 

However, the decision was taken after the pre-budget economic survey, revealing that the Federal Board of Revenue earned Rs3.879 trillion in FY24 compared to Rs2.239 trillion in FY23.

The said tax exemption was provided in an account of income tax, sales tax, and customs duty.

Meanwhile, the government had also provided Rs2.858 trillion exemption in GST in FY24.

However, the authorities raised the GST rate from 17 percent to 18 percent to generate additional revenue from the consumers to meet the condition of the International Monetary Fund (IMF), which asked the government to abolish the exemptions.

The tax exemption on petroleum goods led the national exchequer to Rs1.257 trillion in FY24. The cost of cellular phone exemptions was reported as Rs33.057 billion in 10 months of FY24. 

At the same, the national exchequer lost Rs57.52 billion due to the exemption in income tax.