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<\/p>\nRs3,950 billion allocated for debt servicing, Rs800 billion for PSDP 2022-23, says Miftah | Higher taxes on property, vehicles, overseas card payments as agriculture machinery, solar panels become cheaper | Tax exemption widens for salaried persons, and business individuals | govt employees get 15% raise
\nTLTP
\nISLAMABAD
\nThe federal government has tabled the annual budget for the fiscal year 2022-23 in the National Assembly with a total outlay of Rs9.502 trillion, of which Rs7.4 trillion will be financed by taxes and non-tax revenues. The government will be spending a whopping Rs3.950 trillion, over 41% of the total budget, on the repayment of debt and the payment of interest on loans. Rs1523 billion have been allocated for the defense budget and Rs800 billion for the public sector development programs (PSDP).
\nThe PMLN-led government has earmarked Rs699 billion for targeted subsidies and Rs1242 billion for grants including the money for Benazir Income Support Program (BISP). The allocation for BISP has been increased from Rs250 billion to Rs364 billion. Federal Finance Minister Miftah Ismail presented the budget in the National Assembly. The government has proposed changes in customs duty, additional customs duty, and regulatory duty on 400 items related to the manufacturing sector.
\nThe minister said that in the outgoing fiscal year, the fiscal deficit was 8.6% of the GDP and the government plans to lower it to 4.9% of the GDP. He said public debt increased to Rs44.365 trillion in the outgoing fiscal year which was 72.5% of the GDP, though the cap under the law was 60% of the GDP.
\nIn the next fiscal year, the government has set an Rs7,004 billion revenue target for the FBR, while Rs2,000 billion will come from non-tax revenues. The government expects $32 billion in remittances from overseas workers.
\nSales tax changes
\nThe government has proposed changes in customs duty, additional customs duty, and regulatory duty on 400 items related to the manufacturing sector, Finance Minister Miftah Ismail told the house.
\nThe finance minister said that on such items the government has revised the regulatory duty regime and either abolished the regulatory duty or reduced it. However, he added that the government has also imposed regulatory duty on several items to protect local manufacturers.<\/p>\n
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According to the Finance Bill, the sales tax on imported mobile kits of over $100 worth has been increased. The weight rates on imported compressor scrap, motor scrap, and copper scrap have been increased.
\nSales tax on fertilizer and farming input has been increased while further tax on non-active taxpayers has been raised.
\nFinance Minister Miftah said that under the new budget, the government is planning to exempt the import and local supply chain of solar panels (also known as solar modules) from sales tax. The PTI government had imposed 17% GST on the sale of solar panels.
\nPower consumers, using less than 200 units per month will be offered bank loans on easy installments. The government is also withdrawing sales tax on tractors, agriculture equipment, and the supply of wheat, maize, canola, sunflower, and rice.
\nIt is withdrawing customs duty on agriculture machinery. The finance minister announced that the government has exempted at least 30 \u2018active pharmaceutical ingredients\u2019 from the customs duty, adding that raw material for the manufacturer of first aid bandages has also been granted exemption from customs duty.
\nSales tax exemption has also been granted to charity hospitals on their imports. Donations to charity hospitals have also been exempted. Non-profit and charity hospitals with 50 beds or above will be exempted from tax on electricity and all local supplies.
\nSalaried and trading classes
\nGovernment employees will get a raise of 15% while pensioners are getting a 5% raise. The pensioners were given a 10% raise in April this year. The increase in salaries of government employees will cost Rs71.59 billion to the exchequer.
\nPrivate sector employees will also benefit as the government has increased tax exemption for salaried persons by moving up the lowest tax slap from Rs600,000 to Rs1,200,000. This means people being paid less than Rs100,000 in salary will be exempted from tax cuts. Tax exemption benefit has also been extended to businesspersons and association of person by changing the minimum taxable income from Rs600,000 to Rs400,000.
\nThe tax on the profit from three saving schemes, Behbood Savings Certificates, Pensioners Benefit Account and Shuhdas Family Welfare Account have been reduced from 10% to 5%.
\nA fixed tax regime has been introduced for retailers and tax would be collected with the electricity bill. The retailers will be paying between Rs3,000 and Rs10,000 per month in fixed sales tax. They will be asked no questions by the Federal Bureau of Revenue (FBR) officials.
\nPeople earning over Rs300 million per annum (Rs25 million per month) will be slapped with a new super tax of the rate of 2%.
\nProperty owners
\nThe federal government has proposed a 1% \u2018deemed rental income\u2019 tax on property valued at Rs25 million or above.
\nPeople who own a property other than the house they live in and valued at Rs250 or above will be deemed to have received rental income from that property. They will be taxed 1% of the \u201cfair market value\u201d of the property. However, one home owned by everyone will be exempted from this tax.
\nThe government has also proposed a 15% tax on capital gain from immovable property in case of one-year holding period. With every passing year after the holding period the rate will decrease by 2.5% and will drop to zero after six years, the finance minister announced.
\nThis means that if you buy a property and sell it within one year, you will be paying 15% tax, and if you sell in the second year you will be paying 12.5% tax and so on. The government has also increased the advance tax rate from 1% to 2% for filers and to5% for non-filers.
\nVehicles
\nThe ban on the import of vehicles will continue to be in place. The advanced tax on vehicles with engine capacity of 1600CC or above has been increased. In the case of electric engine, 2% advance tax will be imposed. The tax rate for non-filers has been increased from 100% to 200%.
\nBanking sector
\nThe government has pushed up the tax rate for banking companies from 39% to 42%, but this also includes the supertax. Payments made outside Pakistan using credit, debit, or prepaid cards will incur advance tax at the rate of 1% for filers and 2% for non-filers.
\nCigarettes
\nTo tackle smuggling and tax pilferage, Ismail said that the government has decided to impose a \u201ctrack and trace\u201d system for cigarette companies. So far, the system has been installed in three companies.
\nThrough the implementation of the system, Ismail hoped to raise another Rs50 billion in tax from cigarette companies, taking the total from Rs150 billion to the targeted Rs200 billion.
\nBusiness class air travel
\nBusiness-class air tickets will now cost more as the government is planning to slap Rs40,000 in tax.<\/p>\n","protected":false},"excerpt":{"rendered":"
Rs3,950 billion allocated for debt servicing, Rs800 billion for PSDP 2022-23, says Miftah | Higher taxes on property, vehicles, overseas card payments as agriculture machinery, solar panels become cheaper | Tax exemption widens for salaried persons, and business individuals | govt employees get 15% raise TLTP ISLAMABAD The federal government has tabled the annual budget […]<\/p>\n","protected":false},"author":2,"featured_media":265544,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[8269,8384,222,2416,362,364],"class_list":{"0":"post-265531","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news","8":"tag-budget-2022-23","9":"tag-federal-budget","10":"tag-government","11":"tag-miftah-ismail","12":"tag-pmln","13":"tag-ppp"},"yoast_head":"\n