ISLAMABAD,(Parliament Times): The coalition government headed by the Pakistan Muslim League-Nawaz (PML-N) has started presenting its “growth and investment-oriented” budget for Financial Year 2022-23 in the National Assembly.
Miftah Ismail, while presenting the budget proposals, said that out of total Rs 9.502 trillion budget, an amount of Rs3,950 billion had been allocated for debt servicing and Rs800 billion earmarked for the Public Sector Development Programme (PSDP 2022-23). He said an amount of Rs1,523 billion had been earmarked for defence expenditures, Rs550 billion for civil administration and Rs 530 billion for pensions. Similarly, Rs 699 billion had been proposed for providing targeted subsidies to the poor segments of society. Miftah said that owing to the high petroleum prices, people earning less than Rs40,000 will be given relief of Rs2,000 per month, which will continue in FY23 budget as well.
He said that taxes will be imposed on goods that are mainly consumed by the rich to provide relief to the common man.The finance minister said that the federal government has established pension fund and released Rs10 billion for it.Miftah Ismail said that Prime Minister Shehbaz Sharif wanted to extend maximum relief to the people, especially the poor during these difficult times.“For this purpose, the government has taken several steps to provide subsidy and assistance. However, the continuation of this (relief) will require more resources,” he added. He emphasised on the need to impose special tax on higher income earnings in order to divert the resources to the poor people.“Our budget philosophy is to enhance agriculture production, especially the edible oil in order to reduce agricultural imports. We need to promote industries to bolster exports and earn valuable foreign exchange,” he added. This, he said, will help address the issue of balance of payments on permanent basis.15pc increase in salaries of govt employees
The finance minister announced that owing to the high inflation in the country, the government has increased salaries for its employees by 15 per cent, adding that the pensions have also been raised by 5 per cent.
The minister said that FBR revenue has been estimated at Rs7,004 billion for the next fiscal year. “This includes Rs4,100 billion share of provinces. The net revenue with the federal government will be Rs4,904 billion. The non-tax revenue will be Rs2,000 billion.”
The finance minister said that austerity is the top priority of the present government. “Reducing government’s expenditure is part of this budget and we are taking concrete steps in this regard.”He said that the petrol quota of cabinet members and government officials will be reduced by 40 percent. “There will also be ban on foreign tours under government expense, except the important ones.”Tax exemption slab for salaried class increased from 0.6m to Rs 1.2m. Miftah said that the tax exemption slab for salaried class has also been increased from Rs600,000 to Rs1.2 million.
“This step will benefit the salaried people and enhance business activities,” he added. He said that tax on profit of Saving Certificates, Pensioners Benefit Accounts and martyrs family welfare accounts has been slashed from 10 to 5 per cent.According to the vision of the premier, the finance minister said that a medium term macro economic framework has been prepared to put the economy on the path of development.
He expressed the confidence that the government will be able to put the economy in the right direction through the framework. “Our biggest challenge is to achieve growth without Current Account Deficit. Therefore, at least five percent will be achieved without disturbing the balance,” he added.
According to the government, this budget would lay “the foundation for future growth budgets” with its focus on exports and agriculture.The budget will provide relief to the middle class as the government has decided to increase the income tax ceiling on the salaried class from Rs6 lac to Rs12 lac per annum. The salaries of the government employees would increase by 15 per cent as well.
Due to the inflation, households earning less than Rs40,000 will be compensated by the government in addition to a significant increase in the funding for Benazir Income Support Program (BISP). BISP scholarship is being extended to 10 million students.
Similarly, the government has also decided to give tax breaks to IT, agriculture, clean energy, and education sectors. In this budget, it has been proposed to waive sales tax on the import and distribution of solar panels to boost clean energy. The agri machinery, including tractors, along with seeds, will also be exempted from tax.
As per the budget documents, agriculture machinery would be exempted from customs duty; greenhouse farming, drip irrigation, and water supply would be exempted from tax.
The government also plans to “shift wealth from rich to poor” through higher taxes on non-productive assets, such as real estate.
“Introduction of tax on non-productive assets of the rich is proposed so that a balance is created which would directly impact the property prices making them cheaper for the lower economic classes. A tax of 5 per cent will be imposed on the second property worth 2.5 crore,” it added.
The government also decided to raise the budget for the Higher Education Commission (HEC) by 67 per cent. It also planned to announce 5,000 scholarships for Balochistan students, additional scholarships for coastal areas of Balochistan, and provision of funds for state-of-the-art equipment to the education sector.
The China-Pakistan Economic Corridor (CPEC) projects will be given additional funds to expedite their progress. The government planned to focus its attention on the early start of the Special Economic Zones under the CPEC, it added.
In order to boost industrial growth, the government decided to exempt industrial feeders from power outages. It also raised the minimum tax bracket from Rs4 lakh to Rs6 lakhs for small businesses. The fixed income and sales tax regimes would also be introduced starting from Rs3,000 and less than Rs10,000 after that the FBR will not ask them for further taxes.
In this budget, taxable profits limit on saving certificates, pensioner benefits, martyrs’ family welfare account investments is being reduced from 10 per cent to 5 per cent.