15% raise in salaries announced in Budget
Govt unveils Rs9.118tr budget with whopping Rs5.1tr deficit; Special package for Balochistan; monthly stipend of Rs2,000 for poor families from June; spend 550 billion on civil administration; provinces will get Rs4.2tr; Rs580b reserved for subsidies; luxury tax on big houses, farm houses, reduces taxes on import of different raw materials; Rs1522b reserved for Defense; Rs800b fixed for development;
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Federal Minister for Finance Miftah Ismail presented the annual budget 2022-23 in the National Assembly on Friday. He announced the total volume of the budget Rs Rs9.502 trillion.
The budget deficit is expected to hover around Rs5,100 billion; while the circular debt of electricity has reached Rs2,500 billion and for gas, it has ballooned to Rs1,400 billion.
According to the budget speech, the total expenditure will be estimated at Rs9,502 billion and the revenue target will be Rs6,000 billion. Rs800 billion will be set aside for Annual Development Plan.
The salaries of government employees will be raised by 15 per cent and a special package will also be announced for the backward areas of Balochistan.
The Finance Minister announced raising the tax rate on banking companies to 42 per cent. He said an Advance Withholding Tax will be imposed on sending amounts through credit or debit cards while the Pakistanis who do not pay taxes in other countries will have to pay taxes here in Pakistan.
He said that the production rate is expected to be 5% next year and efforts will be made to bring down inflation to 11.5 per cent. He said that the gross deficit would be brought down to 4.9 per cent of GDP.
Main Features of Federal Budget 2022-23
Federal Minister for Finance Miftah Ismail presented the annual budget for the fiscal year 2022-23 in the National Assembly for approval on Friday. The total volume of the federal budget is Rs9.502 trillion.
The total deficit of the federal budget announced by the finance minister of the coalition government is Rs5.1 trillion.
An estimate of tax theft is Rs3 billion in the fiscal budget 2022-23. Luxury tax on big houses, and farmhouses, reduce taxes on the import of different raw materials. The government ended taxes on the local supply of solar panels.
Taxes on Vehicles:
Miftah said that there is a proposal to increase advance tax on 1600 cc vehicles.
Taxes on Property:
On purchasing the property, an advance tax has been imposed by the government as Miftah said a new tax will be levied on those who own two houses worth more than Rs25 million.
The budget proposed to impose a one per cent tax on property rents worth over Rs 25 million and those earning more than Rs300 million per annum will be paid a 2 per cent tax.
Salaries and Pensions:
The government has announced 15 per cent increase in the salaries of its employees. Rs530 billion is allocated for pensions for the next fiscal year.
Rs1523 billion are allocated for the Defence sector while Rs550 billion will be spent on civil administration.
Rs800 billion fixed for the development projects across the country. A monthly stipend of Rs2,000 is allocated for poor families from June.
Subsidies and Grants:
Total subsidies will cost Rs1,515 billion and Rs1,090 billion will be spent on grants. Government has allocated Rs699 billion for the targeted subsidy. Finance Minister Miftah also announced a subsidy of Rs570 billion for power consumers.
Subsidy for Petroleum Products:
A subsidy of Rs71 billion will be given on petroleum products. In the current fiscal year 2021-22, a subsidy of Rs377 billion has been given on petroleum products.
Funds for Provinces:
The federal government has fixed Rs4.2 trillion for provinces. The provinces have a share of Rs3,512 billion in revenue and 3,803 billion in federations while the annual development program expenditure will be Rs550 billion.
Rs3,950 billion will be spent on repaying interest on loans. The government has allocated more than 40 per cent to service Pakistan's foreign and domestic debt. Pakistan's total debt has reached US$128 billion.
Energy Sector and Load Shedding:
FM announced zero load shedding at the feeders of industrial areas. He said the budget allocated Rs83 billion for the national energy sector. He said a subsidy of Rs570 billion has been proposed for power consumers while sales tax on the solar panel has been abolished.
Poverty in Country:
Finance Minister Miftah said that more than 70 million people are living below the poverty line in Pakistan.
Benazir Income Supports Program (BISE) now accommodate 12 million people. The amount of BISP has increased from Rs 250 billion to Rs364 billion. A special package for Balochistan. The government announced to end custom duty on import of agriculture machinery. Finance Minister Miftah also announced a subsidy of Rs570 billion for power consumers.
Package for Youth:
Miftah said 2 million employment opportunities will be provided under the Youth Employment Policy as well as youths will be provided interest-free loans up to half a million rupees for business.
He also said that laptops will also be provided under Green Youth Movement and started a “Talent Hunt” for people between the age of 11 to 25. He said 250 mini sports stadiums will be set up in the country.
Package for Film, TV industry:
The Finance Minister announced that a tax rebate is being given on film and drama exports while the income of cinemas and producers is being exempted from income tax.
He said cinemas, production houses, film, museums, and post-production facilities are also being given CSR status.
The government will give rebates to foreign filmmakers on local partnerships and 70 per cent of shooting in Pakistan while the 8% withholding tax on distributors and producers is abolished.
The customs duty on import of film and drama equipment has been ended for the next 5 years while the sale tax has also been ended on the said equipment.
Package for Industrial Sector:
In the next financial year 2022-23, a subsidy of Rs40 billion will be given to the industrial sector for the supply of LNG and in the current financial year, a subsidy of Rs81 billion has been provided to the industrial sector for the supply of LNG.
Package for Karachi:
FM announced to continue Karachi Transformation Plan and the government will spend Rs483 billion on Karachi. There is a proposal to allocate funds for the completion of the Karachi Circular Railway, Green Line Bus, and resettlement plan for local IDPs, and work on Mehmoodabad, Gujar Nala, and Orangi Nala.