Federal Budget Approval

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Due to the absence of the majority of the opposition in the National Assembly, the federal budget was approved without incident. However, after several adjustments were made to meet IMF requirements while averting too much voter criticism, the document as passed underwent some substantial alterations from the one that was initially presented. Unfortunately, many of the adjustments eliminated earlier offered assistance for low- and middle-income households. The whole budget has decreased from the Rs9.5 trillion that Finance Minister Miftah Ismail submitted three weeks ago to around Rs8.7 trillion, which is still about 15.5 percent higher than the budget from the previous year. Over 45% of the overall budget is used to service debt. One of the most significant amendments was the implementation of Rs. 50 fee on petroleum goods, though Miftah later clarified that the modification only served as a preemptive request for a levy and that there are no immediate plans for it to be implemented. We can only hope that Miftah’s prediction comes true, as the general public has already found the cost of fuel to be prohibitive. An intriguing proposal that would base sales tax collection on electricity bills for merchants was also accepted, along with one that would levy a tiny 5 percent tax on IT and software consultants. Over Rs150 million ($12.5 million) in annual income or more will be subject to the so-called super tax, which ranges from 1% to 4%, as well as an industry-wide super tax of 10%. Cell phones have also increased in price, but an intriguing development has occurred: 3D glasses, projectors, and other theatre equipment are now duty-free, possibly to encourage people to fully immerse themselves in movies and ignore the status of the economy.

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