Prime Minister Shehbaz Sharif has rejected several key budget proposals from the Federal Board of Revenue (FBR) that would have had a direct inflationary impact on the general public, including the proposal to increase the withholding tax rate from 0.6% to 0.9% on cash withdrawals from banks by non-filers.
Four major revenue proposals from the FBR have been turned down by the Prime Minister, which collectively have a revenue impact of Rs. 150-200 billion:
- Withholding Tax Increase: The proposal to raise the withholding tax rate on cash withdrawals was estimated to generate an additional Rs. 20 billion in 2024-25.
- Taxation of Pensions: The Prime Minister has rejected the taxation of pensions.
- Sales Tax Rate Increase: The proposal to increase the standard rate of sales tax from 18% to 19%, which would have had a revenue impact of Rs. 40-50 billion, was also turned down.
- Sales Tax on Petroleum Products: The suggestion to impose an 18% sales tax on petroleum products, with an estimated impact of Rs. 30-40 billion, was rejected as well.
These decisions reflect the Prime Minister’s commitment to mitigating inflationary pressures on the public.
