Islamabad, The recently passed Finance Act 2024 introduces targeted tax adjustments and sector-specific fiscal measures, following Parliament's approval and subsequent presidential endorsement. The legislation aims to foster equitable economic growth and aligns with International Monetary Fund (IMF) recommendations, shifting tax burdens and providing relief across various sectors.
According to JS Global, the Finance Act features significant adjustments, including tax relief for the automotive sector and increased levies for construction. Notably, the amendment affects mutual funds within the Pakistan Stock Exchange (PSX), where the tax rate on capital gains for stock funds with dividends below capital gains is now reduced to 15% from the initially proposed 20%. Additionally, higher income brackets, specifically individuals and associations with annual incomes over Rs 10 million, will incur a 10% additional surcharge on their income tax.
The Act lacks populist measures, instead focusing on revenue-enhancing strategies to support fiscal consolidation. This approach is anticipated to maintain investor confidence in Pakistan's economic stability and assist in securing a vital IMF agreement, potentially to be finalized in July 2024.