The House of Representatives has approved the Finance Act 2025, providing legal support to the taxation clauses specified in the forthcoming fiscal year’s budget.
During Saturday’s meeting, the Act received a majority vote, while all suggested modifications to the tax clauses for FY 2025/26 were turned down.
While addressing the assembly, the Finance Minister remarked that the Act aims to expand the tax base, eliminate revenue leakages, and integrate informal sectors into the taxation framework. He highlighted that investor interests were taken into account during adjustments to tax rates, with a goal of ensuring consistency in revenue policy.
The Act incorporates an increase in Pigouvian levies on alcoholic beverages and tobacco products, citing their negative health effects. Furthermore, a two percent luxury tax has been imposed on gold and silver jewelry.
Despite traders voicing concerns and staging protests regarding the updated taxes, the Finance Minister characterized such responses as typical, noting that changes in taxation were implemented only where necessary.
Previously, lawmakers had advocated for tax reforms that bolster domestic production. Key issues included abolishing the green tax, effectively enforcing pollution taxes, removing the luxury tax on jewelry, and adopting a more equitable taxation framework.
Additionally, some members criticized the efficiency of revenue collection, pointing out mismanagement and questioning the government’s commitment to social responsibility in light of increasing tax burdens on the general populace.
