Rs14.46tr federal budget with focus on economic stability, inclusive growth announced
The federal budget 2023-24 with a total outlay of 14460 billion rupees has been announced with focus on economic stability, sustainable and inclusive growth as well as curbing inflationary pressures.
Finance Minister Ishaq Dar presented the budgetary proposals for next fiscal year in the National Assembly this evening.
The budget envisages special initiatives for the uplift of agriculture, industries, and IT sectors, besides, relief for various segments of society including the salaried class.
As regards agriculture, the Finance Minister said that the limit of agri credit is being enhanced to 2250 billion rupees as compared to 1800 billion rupees of the outgoing fiscal year. Thirty billion rupees have been earmarked for shifting fifty thousand agriculture tube wells to solar energy. He said all taxes and duties on import of quality seeds are being abolished. Similarly, custom duty on saplings is being waived off. Combined harvesters are being exempted of all duties and taxes in order to promote their use in the field. He said that seeders, rice planters and dryers are also being exempted from duties and taxes to enhance rice production.
Ishaq Dar noted that agro industry can bring revolution in the rural economy. Five billion rupees have been allocated in the budget for the provision of concessional loans to this sector. He said it has been decided that the agro-based industrial units having a turnover of 800 million rupees will be exempted from all sorts of taxes for a period of five years.
Under Prime Minister’s Youth Business and Agriculture Loan Scheme, small and medium loans will be issued on easy installments. For this purpose, ten billion rupees have been earmarked for mark-up subsidy for the next fiscal year. Six billion rupees has been set aside for subsidy on imported urea fertilizer.
The Finance Minister said that small farmers will be provided with loans on low markup with the partnership of provincial governments. For this purpose, a substantial amount of ten billion rupees to increase agriculture production.
The Finance Minister said that a modest growth target of 3.5 percent has been set for the next fiscal year. He said the country will soon go to the general elections but instead of presenting an election budget we have prepared a responsible budget. He said we have chosen elements of real economy after hectic consultations because of which the country will move forward on the path of progress in the minimum time.
He that the turnover threshold of Small and Medium Industries has been increased from 250 million to 800 million rupees by increasing the tax concessions of the SMEs. He said SMEs Assan Finance Scheme has also been restored while establishing a Crediting Rating Agency for the SMEs has also been proposed.
For Industry and Export sectors, the Finance Minister said that an export council of Pakistan is being constituted under the supervision of Prime Minister to take important decisions with regards to exports of the country.
He said sales tax has been exempted for local purchase through Online Market Place to promote exports of mineral and metals. He said the minimum tax on all Listed Companies is being reduced from 1.25 percent to 1 percent while five percent regulatory duty is also being abolished on Synthetic Filament Yarn which is not manufactured in the country to promote the textile industry. Custom duty on Pet Scrap is also being decreased from twenty percent to eleven percent.
Ishaq Dar said two percent Final Tax for purchasing Immovable Property under Foreign Remittance by Overseas Pakistanis is also being abolished. He said Fast Track Immigration to facilitate Overseas Pakistanis will be provided at all airports in the country while a special scheme will be launched for giving major rewards to Remittance Cards Holder through a transparent draw.
The Finance Minister was confident that the IT sector will prove to be an engine of growth in the coming years. He said that at present, concessional 0.25 percent income tax is in place for promotion of IT exports. He said this facility will be continued till 30th June 2026.
He noted that free lancers have to face difficulties, while submitting monthly sales tax returns. He said free lancers have been exempted from sales tax registration and returns for annual exports worth 24,000 dollars in order to facilitate business environment. In addition, a simple one-page income tax returns form is being launched for them.
Ishaq Dar said IT and IT-enabled service providers will be allowed to import software and hardware equal to one percent of their exports without any tax. The limit of these imports will be fifty thousand dollars annually. He said it will be ensured to automated exemption certificates for the exporters of IT and IT services.
He announced the establishment of a Venture Capital Fund of five billion rupees for the IT sector. Sales tax on IT services within the precincts of ICT is being reduced to five percent from 15 percent. He said banks will be able to avail the concessional tax of 20 percent for the encouragement of loans in the IT sector. He said that fifty thousand IT graduates will be provided with professional training during the next fiscal year.
Ishaq Dar said ten percent regulatory duty on the import of second hand garments is also being abolished. Similarly, a new scheme of Micro Deposits for low income people is also being launched under National Savings from 1st of the next month.
For Energy Sector, the Finance Minister said the government is exempting the solar panel, inverter, batteries and relevant raw material from custom duty.
He said the government is also launching Bonded Bulk Storage Policy for Petroleum products to control shortage in their supply chain. Under this scheme, a Foreign Supplier will import crude oil and POL products through its own financial sources and store them in Bonded Bulk Storage in Pakistan and later the oil marketing company or any Refinery will be allowed to purchase these products from the Foreign Supplier in time of need.
