Pakistan is preparing to present Budget 2024-25, and prices of several items, especially basic commodities, are expected to rise due to factors like high food prices, currency devaluation, and potential IMF bailout conditions.
PML-N led alliance government is implementing changes such as introducing a 10pc sales tax on sectors currently enjoying no sales tax.
Furthermore, there are plans to gradually remove exemptions on sales and income tax, which could lead to increased prices for items like tractors and pesticides.
Imported items such as leather belt, purses, makeup products, glasses, fragrances, headphones, bath fittings, dyes, and some electronic appliances will also become more expensive due to increased taxes.
Good News for Solar Industry
The incumbent government is considering incentives for local assembly of solar panels in the upcoming budget. There are no plans for new taxes on solar panels, except for inverters.
The government aims to attract Chinese manufacturers to Pakistan but no MoU was signed during a recent visit. Net-metering policy is not expected to change, and the government plans to encourage it further. About 0.3% of electricity consumers have rooftop solar net-metering connections.
On the positive side, the budget includes exemptions on customs duty for raw materials used in solar energy products, aiming to promote renewable energy adoption. To boost the IT sector, there will be a 0.25% concessional rate of income tax until June 30, 2026, and freelancers earning up to $24,000 per year will be exempted from sales tax registration and filing tax returns.
Reports quoting sources claimed withdrawal capping of fixed duties and taxes on the import of old and used vehicles of Asian makes above 1300cc, potentially increasing their prices.
Several measures are also being considered which will impact average.
