Finance Minister Miftah Ismail is presented the Federal Budget for the fiscal year 2022-23 (FY 2022-23) in the National Assembly. Miftah Ismail began his budget speech by bashing the previous PTI-led Government for all the hardships being faced by the country today.
“An inexperienced team brought the country to the brink. Different people presented the budget every year presenting different policies which hurt investor sentiment,” said the Finance Minister, adding that current coalition government under premiership of Shehbaz Sharif has started recovering the economy through tough decisions.
The budget outlay for the fiscal year 2022-23 is Rs. 9,502 billion, which is almost a trillion rupees higher than last year’s budget outlay.
The Minister said the government had to move towards sustainable growth, adding that the growth target set for next year was 5%. “The problem of our economy is that growth is 3-4pc, but when it moves up to 5-6pc, our current account deficit goes out of control, because we give priority to the elite, which increases our imports. We need to adopt new thinking, to facilitate the lower-income section to increase domestic production,” said the Finance Minister.
Miftah Ismail added that the government is aware that common man is struggling with high prices of basic commodities and the coalition government is working day and night to bring them down. He said that the government had set a target for 11.5 percent inflation next year.
According to Finance Minister Miftah Ismail, the government has set a target to curtail imports at $70 billion, while bringing exports up to $35 billion during fiscal year 2022-23.
Furthermore, the Finance Minister announced the proposal to increase the minimum tax bracket for small business persons from Rs. 0.4 million to Rs. 0.6 million, while minimal taxable income limit has been raised from Rs. 0.6 million to Rs. 1.2 million on salaried class.
Furthermore, the immovable property with a value of more than Rs. 25 million will be taxed at 1 percent of the fair market value. This tax will be applicable on individuals who have more than one immovable property (one property will be exempt from the tax).
Furthermore, the taxable profit limit on savings certificates, pensioner benefits, martyr’s family welfare account is reduced from 10 percent to 5 percent.
Fixed income and sales tax for small retailers has also been proposed, which will be collected through utility bills.
Tax Exemption For Import of Solar Panels
Finance Minister in his budget 2022-23 speech has proposed a tax exemption on import of solar panels and distribution. The decision will encourage the adoption of renewable energy in the country.
Tax Collection Target
The government has set a tax collection target of Rs. 7 trillion for the Federal Board of Revenue (FBR) for FY23.
Advance Withholding Tax
Advance Withholding Tax will be collection from those sending remittances abroad via credit card, debit, and pre-paid cards. This will be charged at the rate of 1% for filers and 2% for non-filers.
Meanwhile, Advance Tax will be increased on cars 1600cc engine capacity and above. Furthermore, the tax rate on non-filers will be increased to 200 percent, while 2 percent advance tax will be charged on electric cars.
Tax Exemption for Pharmaceutical Companies
The Finance Minister has proposed a complete exemption on custom duty on pharmaceutical ingredients.
Miftah Ismail has proposed Rs. 51 billion for education projects in his speech for the Federal Budget 2022-23. Meanwhile, the Government has allocated Rs. 65 billion for the Higher Education Commission (HEC). There is also an additional Rs. 44 billion allocated for HEC’s development schemes.
Furthermore, the government will provide 100,000 laptops to students on easy installments.
The Finance Minister has announced a Youth Employment Policy will provide youth a chance to have access to 2 million jobs opportunities.
Loans For Youth
The Government will provide interest-free loans of up to Rs. 0.5 million to the youth.
The Government has allocated funds to construct 250 mini-sports stadium for youngsters.
Tax on Film Industry
Finance Minister has proposed to eliminate 8 percent withholding tax on film distributors and producers.
Energy Sector and Dams
The Government has also allocated additional funds for the early completion of Bhasha and Mohmand Dams. Furthermore, an amount of Rs. 73 billion has been set aside for improving the power infrastructure in the country.
Information Technology (IT)
An amount of Rs. 17 billion has been allocated for the IT sector to provide trainings to youth, provision of laptops, and improving the IT network.
Miftah Ismail has proposed an amount of Rs. 202 billion to be allocated for highways and ports.
Tax on Higher Income Persons
The proposal has been made to impose 2% tax on individuals, AOPs and companies with yearly revenue/income of more than Rs. 300 million.
An amount of Rs. 24 billion has been proposed for the health sector.
Tax Relief on Agriculture
Finance Minister in his speech for Budget 2022-23 has proposed to remove sales tax and custom duty on agriculture equipment and seeds of various crops.
Tax on Cigarette Companies
A track and trace mechanism has been implemented to increase the income from taxes on cigarette companies.
Salaries on Government Employees
The salaries of government employees has been increased by 15%.
The budget for BISP has been increased to Rs. 364 billion, up from Rs. 250 billion in the previous year.
The Government will also provide a subsidy of Rs. 2,000 to poor people for petrol.
Read more: Sasta Petrol Sasta Diesel Scheme.