Government Announces Major Cut in International Debit and Credit Card Transaction Tax
Tax on international debit and credit card transactions reduced from 5% to 0.5% in the new budget
The government has announced a major reduction in the tax on international debit and credit card transactions.
Under the new budget, the tax on international transactions made through debit and credit cards has been reduced from 5% to 0.5%.
The government has also abolished the Capital Value Tax (CVT) on foreign assets. According to the Finance Minister, the move is intended to encourage Pakistanis to declare and bring their foreign financial assets on record.
Budget Documents
According to the budget documents, the size of the federal budget for the upcoming fiscal year has been set at Rs18.771 trillion. The annual tax collection target for the Federal Board of Revenue (FBR) has been fixed at Rs15.264 trillion, while gross revenue is estimated at Rs20.6 trillion.
Non-tax revenue is projected at Rs5.336 trillion.
The documents state that Rs8.848 trillion will be transferred to the provinces during the next fiscal year, while the federal government’s net income is estimated at Rs11.751 trillion. The government expects to secure Rs2.034 trillion in domestic financing and Rs813 billion from external sources. It also plans to raise Rs4.012 trillion through Treasury Bills, Pakistan Investment Bonds, and Sukuk.
According to the documents, Rs161 billion is expected to be generated through the privatization of state-owned enterprises in the next fiscal year. Allocations include Rs3 trillion for defence and Rs1 trillion for development projects.
The government plans to spend Rs17.495 trillion on current expenditures, while Rs8.054 trillion has been earmarked for debt servicing. Pension payments will receive Rs1.169 trillion, and Rs1.071 trillion has been allocated for the civil government. Additionally, Rs430 billion has been set aside in the budget for emergency measures during the new fiscal year.
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