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Tuesday, May 21, 2024

What to expect from FY23-24 budget

The government's intention to strike a balance between revenue generation and sectoral growth will undoubtedly play a pivotal role in shaping the country's economic landscape in the upcoming year.

The outlay for the federal budget 2023-24 is expected to be at Rs16,600 billion or Rs16.6 trillion compared to the Rs9.5 trillion federal budget for the fiscal year 2022-23. It will be tabled in the National Assembly on June 9.

The upcoming federal budget for 2023-24 is expected to include a range of tax measures aimed at achieving a tax revenue target of Rs 9-9.2 trillion. In the latest developments, the federal government has proposed raising taxes on various imported luxury items, such as cell phones, cars, and more, in the fiscal year 2023-24 budget.

According to media reports, the government is contemplating an increase in duty, specifically on mobile phones valued at over $100. Furthermore, it has been revealed that imported energy-saving bulbs, chandeliers, and LEDs are expected to become pricier in the upcoming fiscal year 2023-24 budget.

The primary objective behind these tax adjustments is to generate substantial revenue for the government. It is anticipated that by imposing a 25% sales tax on luxury items, the government aims to accrue a revenue of around Rs45 to 55 billion. This sales tax rate will be applicable to imported branded shoes, purses, sunglasses, perfumes, headphones, iPods, speakers, doors, windows, bath fittings, tiles, and sanitary products. Sales tax on imported electronic items, makeup goods, hair colors, dyes, and pet food will remain 25% in the upcoming budget.

Read more: Elevating the Stakes: Harnessing Higher Taxes to Extinguish Smoking in Pakistan

In a separate development, it has come to light that the federal government plans to allocate a substantial sum of Rs102.86 billion for power sector projects in the upcoming fiscal year 2023-24 budget. This information has been cited from reliable sources and reported by ARY News.

Recommendations have been made to allocate Rs102.86 billion specifically for the power sector projects in the new fiscal year. As part of these recommendations, it has been suggested that 32 new schemes be launched in the power sector, indicating a firm commitment towards developing and enhancing the country’s power infrastructure.

These proposed tax increases on luxury items and the substantial allocations for power sector projects signify the government’s determination to bolster revenue generation and prioritize the development of vital sectors. However, it remains to be seen how these measures will impact the economy and the daily lives of the citizens.

Read more: Tax the rich, support the poor, IMF chief asks Pakistan

As the fiscal year 2023-24 budget takes shape, it is expected that further details and clarifications regarding the proposed tax increases and power sector allocations will be unveiled. The government’s intention to strike a balance between revenue generation and sectoral growth will undoubtedly play a pivotal role in shaping the country’s economic landscape in the upcoming year.