Federal Minister for Finance and Revenue Miftah Ismail presented the budget for fiscal year 2022-23 on Friday in an orderly session of the National Assembly of Pakistan, since there is no practical opposition in the national assembly as PTI lawmakers have tendered their resignations.
Finance Minister started his speech by bashing the PTI government. He accused the PTI government of hurting the economy and lives of the people. “An inexperienced team brought the country to the brink. Different people presented the budget every year presenting different policies which hurt investor sentiment,” the finance minister said. He assured that his government had begun repairing the economy by taking the much-needed tough decisions.
Finance Minister Miftah Ismail presenting Federal Budget 2022-23 before National Assembly of Pakistan. pic.twitter.com/QvEi08jxu8
— Ministry of Finance (@FinMinistryPak) June 10, 2022
The current expenditure for fiscal year 2022-23 budgeted at Rs 8,694 billion is 15.5 percent higher than last year. Interests payment or debt servicing constitute 45.4 percent of the total current expenditure—the largest expenditure in the new budget—standing at Rs. 3950 billion after an increase of 29.1 percent as compared to last year.
The proposals in the budget include raising minimum taxable salary to Rs 100000 per month from 50000 per month. A 15 percent increase in the salaries of government employees has also been proposed in the new budget. Import and distribution of the solar panels is to be exempted from sales tax in the new budget. Pharmaceutical ingredients will be completely exempted from custom duty. Meanwhile advance tax on cars above 1600 cc will be increased and advance tax of 2 percent of the value of high-value hybrid and electric vehicles has been suggested. Education projects and health sector will receive Rs 51 billion and Rs 24 billion respectively. An extra 2 percent tax is to be imposed on people earning an annual income of Rs300 million or more. Moreover, those sending remittances abroad via credit, debit and pre-paid cards will have to pay advance withholding tax.
Defense budget of Rs 1523 billion makes up 17.5 percent of the total current expenditures. Whereas Rs 2,158 billion has been allocated for the Public Sector Development Programme (PSDP). Of the Rs 2,158 billion allocated for the PSDP, federal PSDP makes up Rs727bn, which is 19.2 percent less from last year.
Total revenue budgeted for fiscal year 2022-23 is Rs 9,004 billion. It comes down to Rs 4904 billion after deducting Rs 4100 billion set for the NFC award. The tax collection target for the FBR has been set at Rs 7004 billion, 20.1 percent higher than last year. Meanwhile, the overall budget deficit stands at Rs3,798bn, which is 4.9pc of GDP, down from 6.3 percent of GDP last year.
The GDP growth target has been set at 5 percent for the upcoming fiscal year, while the target for inflation is 11.5 percent.