Sunday Jun 12 2022

'Growth' budget 2022-23 at a glance

Prime Minister Shehbaz Sharif approves Federal Budget 2022-23 proposals which were presented in the Parliament on June 10, 2022. — PID
Prime Minister Shehbaz Sharif approves Federal Budget 2022-23 proposals which were presented in the Parliament on June 10, 2022. — PID

ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail Friday unveiled the coalition government's maiden federal budget for the fiscal year 2022-23 in order to stabilise economic growth and control the increasing inflation.

“The budget 2022-23 is a growth budget. It is based on a well-thought-out strategy to boost the economic growth earlier outlined in the medium-term budgetary strategy paper for FY23 to FY25, which gave a clear roadmap of the strategic priorities, revenue and spending policies of the government,” the document released by the Ministry of Finance read.

Read more: 'Balanced, stabilising', experts, businessmen weigh in on budget 2022-23

Here is a list of the salient features of the federal budget:

  • GDP growth target at 5%
  • GDP projected at Rs78.3 trillion against Rs67 trillion this year
  • Inflation expected at 11.5% in FY23 against 11.7% in FY22
  • Tax-to-GDP to be taken to 9.2% in FY23 against 8.6% in FY22
  • The fiscal deficit is to be reduced to 4.9% in FY23 against 8.6% in FY22
  • The primary surplus is expected at 0.19% in FY23 against a primary deficit of 2.4% in FY22
  • Imports projected at $70bn in FY23 vs $76 billion in FY22
  • Exports projected at $3 billion in FY23 vs $31.3 billion in FY22
  • Remittances estimated at $33.2 billion vs $31.1 billion in FY22
  • Current account deficit projected at 2.2% of GDP in FY23 versus 4.1% of GDP in FY22
  • Total interest payment of Rs3,144 billion; domestic interest payment: Rs2,770 billion and external interest payment R373 billion
  • Debt ceiling at 60% of GDP
  • Overdue receivables of the petroleum sector are estimated at Rs284 billion, while next year's allocation has been set at Rs71 billion
  • Five-year tax holiday for film-makers, new cinemas, production houses
  • Fixed income and sales tax on small retailers — to be collected with electricity bills
  • 100% depreciation adjustment in the first year of operations for corporates and businesses
  • Advance income tax at import stage to be made adjustable
  • People having more than one immovable property worth more than Rs25 million will be assumed to have 5% rental income on market value, which will be taxed at 1% of this fair market value
  • 15% capital gains tax on immovable property on one year holding period, reducing by 2.5% for every additional year
  • Advance tax on filers to be increased to 2% from the previous 1% on purchase of property (non-filers: 5%)
  • People/companies with income above Rs300 million to pay an additional 2% tax
  • Increased advanced tax on autos above 1600cc
  • Taxation increased on banks to 42% from the previous 39% (including super tax)
  • Credit/debit card payments made outside the country to be taxed at 1% (filers) and 2% (non-filers), adjustable in full-year tax
  • No sales tax on solar panels
  • Annulment of sales tax on tractors, wheat, maize, sunflower, canola etc.
  • Custom duty eliminated on agriculture machinery
  • Custom duties rationalised on 400 items within the manufacturing sector
  • Tariff rationalised on synthetic yarn (PSF)
  • More than 30 pharma APIs free from custom duties
  • 10% salary increase for government employees
  • Pension increased to Rs530 billion