ISLAMABAD, Pakistan: The Federal Budget 2023-24 with a total outlay of Rs 14,460 billion has been announced with focus on economic stability, sustainable and inclusive growth as well as curbing inflationary pressures.
The Finance Minister Ishaq Dar presented the budgetary proposals for next fiscal year in the National Assembly on Friday 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.
Finance Minister Senator Mohammad Ishaq Dar presented Federal Budget 2023-24 before the National Assembly of Pakistan today. pic.twitter.com/pTjzNMyn6T
— Ministry of Finance (@FinMinistryPak) June 9, 2023
As regards agriculture, the finance minister said that the limit of agri credit is being enhanced to Rs 2,250 billion as compared to Rs 1,800 billion of the outgoing fiscal year. Rs 30 billion have been earmarked for shifting 50,000 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. Rs 5 billion have been allocated in the budget for the provision of concessional loans to this sector.
The minister said that it has been decided that the agro-based industrial units having a turnover of Rs 800 million 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, Rs 10 billion have been earmarked for mark-up subsidy for the next fiscal year. Rs 6 billion 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 Rs 10 billion to increase agriculture production.
The minister said that a modest growth target of 3.5 percent has been set for the next fiscal year. He said that the country will soon go to the general elections but instead of presenting an election budget we have prepared a responsible budget. He said that 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.
Ishaq Dar that the turnover threshold of Small and Medium Industries has been increased from Rs 250 million to Rs 800 million by increasing the tax concessions of the SMEs. He said that 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.
The finance minister said that sales tax has been exempted for local purchase through Online Market Place to promote exports of mineral and metals. He said that the minimum tax on all Listed Companies is being reduced from 1.25 percent to 1 percent while 5 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 20 percent to 11 percent.
Senator Ishaq Dar said that 2 percent Final Tax for purchasing Immovable Property under Foreign Remittance by Overseas Pakistanis is also being abolished. He said that the 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 June 30, 2026.
The minister noted that free lancers have to face difficulties while submitting monthly sales tax returns. He said that free lancers have been exempted from sales tax registration and returns for annual exports worth US$ 24,000 in order to facilitate business environment. In addition, a simple one-page income tax returns form is being launched for them.
Ishaq Dar said that 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 US$ 50,000 annually. He said it will be ensured to automated exemption certificates for the exporters of IT and IT services.
The finance minister 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 5 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 50,000 IT graduates will be provided with professional training during the next fiscal year.
Ishaq Dar said that 10 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 July 01.
For energy sector, he said that the government is exempting the solar panel, inverter, batteries and relevant raw material from custom duty.
The minister said that the 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.
Turning to the education sector, the finance minister said that Rs 65 billion have been earmarked for the current expenditures of Higher Education Commission (HEC) and Rs 70 billion for its development expenditure.
The finance minister announced the establishment of Pakistan Endowment Fund for which Rs 5 billion have been earmarked. He said that this fund will provide merit-based scholarships to the students of high schools and colleges. He said our target is that no talented student remains deprived of education owing to lack of resources.
Ishaq Dar said that Rs 10 billion have been allocated to continue laptop scheme during the next fiscal year.
Describing sports as an important component of education, he said that Rs 5 billion are being set aside for promotion of professional sports in schools and colleges.
The finance minister said that Rs 5 billion have been earmarked for women empowerment. This included skill development, easy loans for businesses and training programs. He said that concession in taxes will also be given to women entrepreneurs.