Finance Minister Miftah Ismail on Friday unveiled the coalition government’s maiden budget with an outlay of Rs9.5 trillion for the fiscal year 2022-23 in the National Assembly.
While presenting the budget proposals in the lower house, Finance Minister Miftah Ismail blamed the past government and its “inexperienced team” for bringing the country to the verge of economic disaster.
The finance czar of the country said that the current budget focuses on “sustainable and inclusive growth.”
The minister said the government had to move towards “sustainable growth”, adding that the growth target for next year was set at 5%.
“The problem of our economy is that growth is 3-4%, but when it moves up to 5-6%, our current account deficit goes out of control, because we prioritise the elite and increase our imports to facilitate them. We need to adopt a new outlook focused on alleviating the lower-income sections of society to increase domestic production,” the minister said.
Miftah assured the lower house that the new coalition government will pull Pakistan out of the economic crisis: “We have done it before, we can do it, we will do it.”
Important budget proposals
The minimal taxable income limit will be raised from Rs0.6 million to Rs1.2 million for the salaried class
Salaries of government increased by 15%
Rs24 billion has been allocated to the health sector
Rs65 billion proposed for HEC
Advance tax to be increased on cars above 1600cc
Exemption of complete custom duty on more than 30 pharmaceutical ingredients
The banking sector will now face a taxation rate of 42%, up from the current 39%
Rs1,523 billion allocated for defence expenditure
Withholding tax abolished on film distributors
A family with a household income of less than Rs40,000 will be given a transfer of Rs2,000
Shedding light on the budget philosophy of the coalition government, the finance minister said: “We will increase the agricultural production to increase arable produce and increase per acre yield while also focussing on the development of industries which can help increase the exports of the country.”
“Prime Minister Shehbaz Sharif wants to provide maximum relief to the people of the country, particularly those who are unable to bear the burden of rising inflation,” he said, revealing that for this purpose, the government has taken several decisions to provide subsidies.
Miftah, while sharing the details of the federal budget for the next fiscal year 2022-23, revealed that the Federal Board of Revenue’s (FBR) target for the next fiscal year was 9% — Rs7,400 billion — while the provinces will be asked to collect Rs4,100 billion.
The federal government’s net revenue is projected to be Rs4,904 billion, non-tax revenue will be Rs2,000 billion, and the expenditure is expected to be around Rs9,502 billion for the next fiscal year, Miftah said.
Pakistan will also spend Rs3,950 for debt servicing, the finance minister told the house, adding that the tax imposed on non-filers has been proposed to be hiked from 100% to 200%.
The total expenditure for interest payments during the current fiscal year has been estimated at Rs3,144 billion — including Rs2,770 domestic and Rs373 international — while for the next year, it will climb to Rs3,950. The finance minister added that the public debt of the outgoing fiscal would stand at 72.5% of the GDP as it reached Rs44,365 billion in March 2022.