BUDGET 2022 2023

[JamD]

You mean that 8L PKR per annum is what a senior bank manager makes in Pakistan? That does not sound right at all. It is likely to be a monthly figure.

Sorry for the confusion but let me try to simplify. The picture in the tweet is annual figures.

Everything I wrote and made plots of are using monthly figures. So 8 lakh is a monthly figure.

 

[Bilal Khan (Quwa)]

Sorry for the confusion but let me try to simplify. The picture in the tweet is annual figures.

Everything I wrote and made plots of are using monthly figures. So 8 lakh is a monthly figure.

Lol if only that was the annual figure, we wouldn't be having this debt issue.

 

[ghazi52]

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KP unveils Rs1,332 billion budget with focus on 'self-sufficiency'​

• Rs418.2 billion allocated for development

BR
13 Jun, 2022

The government of Khyber-Pakhtunkhwa on Monday unveiled a Rs1,332-billion budget for fiscal year 2022-23 with a focus on self-sufficiency.

Announcing the budget, KP Finance Minister Taimur Saleem Khan Jhagra announced that its size would be Rs1,332 billion, including Rs1,109.1 billion for settled districts and Rs222.9 billion for the newly-merged areas (NMAs). He said that the upcoming budget was centred around the theme of self-sufficiency.

Out of Rs1,332 billion, Rs418.2 billion have been allocated for development while Rs85 billion are expected from tax and non-tax revenue. Moreover, Rs275 billion have been earmarked for provincial uplift and Rs31 billion for annual development programme.

The collection from war on terror tax (at 1%) is expected to clock in at Rs68 billion and the province is expected to earn Rs31 billion from oil and gas royalty and surcharge.
The budget for FY23 will have a historic allocation of Rs185 billion for ADP in settled districts and Rs20 billion in merged districts, with a total development budget of Rs316 billion including ADP and AIP in both merged and settled districts, he said. Federal transfers are budgeted at Rs671.5 billion.

In the budget, Rs25 billion have been earmarked for Sehat Card Plus, Rs6 billion for capacity expansion grant for MTIs and its allied entities and medical colleges, Rs11 billion for medicines for primary and secondary healthcare and Rs4 billion for provision of free OPD medicine in all public health facilities of Khyber Pakhtunkhwa.

He added that new reforms included transport monetisation and vehicle leasing policy, change of executive allowance to performance allowance, work from home on Fridays and introduction of fleet cards to save fuel and reduce risk of pilferage across all departments.

“The PSDP funding has been halved to Rs8.3 billion by the federal government,” said Jhagra.
All government employees will get 15% ad-hoc allowance, he said.

Jhagra highlighted that Pakistan’s growth rate during fiscal year 2021-22 stood at 5.5% against India’s 6% “because of Imran Khan’s historic steps such as Ehsaas programme, Kissan and Sehat cards and Panaah Gah scheme.”

“In 2 months, dollar went up from Rs178 to Rs202 while petrol price surged from Rs150-210 per litre,” he said.

Electricity price went up from Rs17 per unit to Rs25 per unit, he said.

Pensions

“Today, around 150,000 Pakistan Railways pensioners from across the country, from grade 1 to 21, are unable to receive their pensions or GP funds because their pensions were never funded,” he said. “The KP province has 700,000 employees with unfunded pensions which is a looming crisis as pension liabilities have reached an unsustainable size and would soon begin eating into the development budget in the next 3-5 years.”

In order to avoid such a scenario, the KP Government is transitioning towards contributory pension, something which should have been done 15 years ago, he said.

He stressed that it would protect pension for generations to come and make regularisation easier.

 

[ghazi52]

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The Finance Bill 2022 represents the First Budget of the current coalition government which has been announced in extremely difficult economic conditions. Due to current account deficit and shortfall in local tax revenue, there has been an increased pressure on the government to adopt certain strict fiscal measures. At the same time, due to higher cost of inflation and cost of living, the government is expected to take some concrete economic decisions which could provide relief to the common man.

In the above backdrop, the current budget therefore contains certain proposals which are aimed to increase tax revenue in a manner that only the affluent or well to do class of the country is affected and the burden of such taxes is not passed on to the lower strata of society.

Important measures announced by the Government are listed as under:-

1. Poverty Alleviation tax on persons earning income above Rs 300 million at the rate of 2%.
2. General rate of tax on banking companies enhanced from 35% to 45%.
3. Deemed rental income concept introduced to collect 1% tax on Fair market value of certain immovable properties of resident persons situated in Pakistan.
4. Capital gains tax provisions relating to immovable properties situated in Pakistan revamped aiming to collect tax on sale of open plots held for a period of less than six years.
5. Capital gains on immovable properties held outside Pakistan to be taxed at normal rate irrespective of holding period.
6. Capital Value Tax at 1% on offshore assets of resident persons exceeding Rs 100 million and 5% on vehicles valuing more than Rs 5 million.
7. Advance tax from non-filer purchasers of immovable properties enhanced from 2% to 5%.
8. Slab rates for salaried individuals amended to decrease the effect on low-income employees and increasing the incidence on higher income slabs.
9. Withdrawal of tax credits on investments in listed securities & insurance policies as well as deductible allowance on house loans.
10. Minimum tax carry forward discontinued.
11. Interest income on government securities to be taxed at normal rate instead of 15%.
12. Rate of tax on income from Bahbood certificates reduced from 10% to 5%.
13. Tax credit withdrawn on income from export of software and IT services with 0.25% tax on export proceeds of such services.
14. Commercial importers to be taxed under final tax regime.
15. 10% withholding tax introduced on fees for international money transfer facilitators.
16. The rate of withholding tax on fees for offshore digital services increased from 5% to 10%.
17. CNIC condition for taxable supplies to unregistered persons withdrawn.
18. Definition of resident individual amended to include Pakistani citizens not resident in any other country.
19. Capital gains tax on disposal of listed securities revised with upward impact on holding period of less than one year.
20. Companies and AOPs required to electronically submit details of their beneficial owners.
21. Exemption from Islamabad Capital Territory Sales tax introduced on locally rendered IT and IT enabled services.
22. Exception available to listed companies on restriction to claim input tax beyond 90% withdrawn.
23. Further tax under sales tax extended to registered persons not appearing on Active Taxpayers List.
24. Sales tax exemption extended on all books imported and locally supplied.
25. FED on tobacco enhanced.
26. Telecommunication services in Islamabad subjected to higher incidence of FED.
27. The concept of essential commodities introduced in Customs law with a proposal to include in the definition of smuggled goods.
28. Sales tax exemption re-introduced on import of machinery, equipment and materials for exclusive use within the limits of Export Processing Zone.
29. Tax amnesties under promotion package of industries withdrawn.
30. Simplified tax regime for retailers and certain service providers introduced.
31. Alternative Dispute Resolution mechanism revamped.
32. Withholding tax on education fees and payments for use of machinery abolished.
33. Reinstatement of withholding tax on remittances through debit or credit cards.
34. Advance tax on registration of vehicles increased.

 

[ghazi52]

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Sindh unveils Rs1,714-billion budget with 'no new taxes'​

• Chief Minister Murad Ali Shah says some existing rates have been rationalised

BR
14 Jun, 2022

Sindh Chief Minister Murad Ali Shah presented on Tuesday Rs1,714-billion budget for fiscal year 2022-23 and announced that no new taxes have been imposed while some previous ones have been rationalised.

In a meeting of the provincial assembly, he said that the current expenditure during next fiscal year will amount to Rs1.254 trillion while development budget is fixed at Rs459.65 billion.

In addition, Rs332b have been earmarked for provincial Annual Development Programme (ADP) and education sector would receive Rs34.2 billion. Moreover, Rs23.3 billion have been allocated for health sector, Rs59.36 billion for sanitation, Rs42.7 billion for agriculture and irrigation and Rs100.64 for transport.

The government has allocated Rs26.85 billion for a pro-poor relief package. To address the looming issue for food insecurity, a subsidy worth Rs23.324 billion has been fixed for wheat.
According to Shah, Sindh is offering farmers the highest wheat support price among all provinces at Rs2,200 per 40 kg.

Meanwhile, he stated that Rs2.552 billion was allocated for seeds, fertiliser and pesticide subsidy in 2021-22 and this amount has been raised to Rs3 billion for next fiscal year.

Shah also announced 15% ad-hoc relief to the government employees. He added that the government has decided to raise salaries by 15% but it was waiting for other provincial budgets because it wanted to offer the highest increase among all provinces.

Moreover, he announced a 5% increase in pensions along with rationalisation of sales tax on services.

“Farmers are facing problems and increase in price of essential commodities is adding to their woes,” he said. “Therefore, social and agricultural uplift is a part of this budget.”


Objective

As part of the post-COVID recovery, a two-pronged strategy has been formulated. On one hand, the plan will focus on low income and social sector while on the other, infrastructure development will be prioritised, he said.

Moreover, the primary aim of the provincial budget 2022-23 is to improve health, law and order, infrastructure and irrigation in the province.

“The priority of the government is to provide relief to the public. To fulfill this, we are not imposing any new taxes for the second successive year,” he said. “In addition, cotton fee, professional tax and entertainment duty have been waived off for 2022-23. Infrastructure development cess for export units has been waived as well.”

“We will ensure economic and political stability in the province,” he said. “Sindh was subjected to neglect and disregard in the past 3.5 years but despite the hardships, we gave as much relief to people as possible.”

Achievements

Speaking about the achievements of the provincial government over the past one year, the chief minister highlighted that Rescue 1122 service was launched and Green Line Metro Bus was operationalised.

“Construction on Orange Line is nearing completion and the government of Sindh has launched the Peoples Bus Service to facilitate the public,” he said. “Around 211 schemes were completed by the Works and Services Department.”

 

[ghazi52]

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Raja Riaz has given much thought to the budget presented by the Shahbaz Sharif government and will start the in the National Assembly...........

 

[ghazi52]

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Pakistan budget needs additional measures to meet goals: IMF​

Discussions with authorities continue to obtain more clarity on revenue and spending items, says official

Reuters
June 14, 2022

A man walks past the International Monetary Fund (IMF) logo at its headquarters in Washington, US, May 10, 2018. PHOTO: REUTERS/FILE

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ISLAMABAD: Additional measures will be needed to bring Pakistan's budget for fiscal year 2022-23 in line with the key objectives of its International Monetary Fund programme, the lender's resident representative in Islamabad said on Monday.

The federal government unveiled a Rs9.5 trillion budget for 2022-23 on Friday aimed at tight fiscal consolidation in a bid to convince the IMF to restart much-needed bailout payments.

"Our preliminary estimate is that additional measures will be needed to strengthen the budget and bring it in line with key programme objectives," Esther Perez Ruiz told Reuters.

Finance Minister Miftah Ismail told Reuters on Saturday that the IMF had expressed concerns about the budget numbers, including fuel subsidies, a widening current account deficit, and the need to raise more direct taxes.

He, however, added that his government was confident they could adjust the budget to bring the IMF on board and was hopeful of securing a successful review this month.

"Discussions with the authorities continue to obtain more clarity on certain revenue and spending items and allow for a full assessment," Ruiz said.

She said the fund was ready to continue to support the authorities’ efforts and in the implementation of policies to promote macroeconomic stability.

Pakistan is halfway through a $6 billion, 39-month IMF programme that has stalled over the lender's concerns over the status of some of its objectives, including fiscal consolidation.

The next tranche that Pakistan is to receive upon a successful review is $900 million, and a green light from the IMF would also open up other global funding avenues.

Pakistan urgently needs funds in the face of dwindling foreign exchange reserves, which have reached $9.2 billion - enough for less than 45 days of imports.

 

[ghazi52]

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Rs3.2tr Punjab budget in parallel session at Aiwan-e-Iqbal..​

LAHORE – Punjab Provincial Minister Awais Laghari presented Punjab Budget 2022-23 in a parallel session of the provincial assembly held at the Aiwan-e-Iqbal after Speaker Chaudhry Pervaiz Elahi halted the budget session amid deadlock.

Deputy Speaker Dost Mohammad Mazari chaired the budget session called by Punjab Governor Balighur Rehman.


The total outlay of the budget is Rs3,226 billion with an Rs683 development budget. South Punjab will get nearly Rs240 billion of the budget.

As per reports, the health budget has been jacked up by 27 per cent with Rs470 billion. An amount of Rs5 billion was allocated to Pakistan Kidney & Liver Institute and Research Centre. The government has earmarked Rs1 billion for setting up the first nursing university in Punjab.

 

[ghazi52]

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Punjab proposes Rs19.53bn for agriculture, irrigation, livestock​

Zahid Baig
15 Jun, 2022

LAHORE: The Punjab government has proposed a sum of Rs19.53 billion as the Annual Development Programme (ADP) collectively for the agriculture, irrigation and livestock sectors for the year 2022-23.

The allocation of the development budget for agriculture according to the budget documents stands at over Rs14 billion and a sum of Rs3.65 billion out of it will be spent on ‘Punjab Resilient and Inclusive Agriculture Transformation (PRIAT). Under this project the government aimed at bringing in latest international technology to transform the agricultural sector on modern lines.

The government also intends to introduce eight new programmes under the research & development head to make possible increase in per acre yield of different lentils, peanut, blackberry and other high valued crops. It is hoped that it would increase prosperity in the rural folk.

According to the documents, the government also intends to promote incentive based crop zoning under which zoning of land of Punjab province will be carried out according to the potential of the lands and incentives and facilities will be provided to farmers of these areas according to it.

The government has proposed an allocation of Rs1 billion for rehabilitation of old bulldozers, Rs0.42 billion for godowns of food for testing facilities and Rs1 billion for the national programme for improvement of watercourses in Pakistan.

For livestock sector, the government has allocated a sum of Rs4.29 billion for the year 2022-23 to carry out various development schemes such as setting up of a sub-campus of the University of Veterinary and Animal Sciences.

While another sum of Rs1.58 billion will be spent for launching of a programme to provide various facilities for livestock farmers in Lahore, DG Khan, Bahawalpur, Rawalpindi and Sargodha which are not available currently. It is proposed that Rs600 million will be spent during the next fiscal under this head.

 

[Jango]

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Bland incentives for tech​

Mutaher Khan
June 13, 2022

Back in the old days, we used to have two days dedicated to a mainstream discussion of the economy, just around the release of the annual economic survey and the budget. Half of that was spent on the share of defence in overall expenditure and the meagre allocation to education and health.

While Pakistan’s macro uncertainty of the past few years has brought the conversation around the economy into the mainstream, nothing really beats the excitement and rush of these two days especially if one is involved in the media or financial services industry. Even if it’s the same cycle of lobbying, promises, lofty targets, shoddy data and wishful thinking.

For now, let’s just stick to what the two documents had in store for Pakistan’s technology industry which after a healthy 2021-22 was hoping to get more attention from the government.

And it kind of did, with an annexe on the IT sector in the latest Economic Survey. But the publication was nothing short of a disappointment, to me at least, as it hardly shared any new or important data point. Instead, it went on about the usual increase in IT exports or the number of broadband users — stuff that everyone who bothers to read the survey will know by heart.




The budget was mostly a non-event too, with most of the recommendations of the Pakistan Software Houses Association (P@SHA) ignored and in some cases, even going against them. For example, the IT body had proposed the reversal of the tax credit regime, which was introduced last year in place of income tax exemption, for IT and ITeS companies. Instead, the government has proposed that income from the export of computer software and IT/IT-enabled services be taxed at 0.25 per cent.

Given the export proceeds of $2 billion in this category in less than 10 months, and projected to hit $2.8bn by the government by the end of June, a 0.25pc tax would have implied revenues of $7 million or around Rs1.4bn. Also remember that in the last days of PTI, the administration had promised a host of new incentives for the IT industry, including a tax holiday and 100pc forex retention even though the final notification for the same never came.

One area where P@SHA apparently got its wish fulfilled was allocation towards skill development for which it proposed Rs10bn be set aside. The government responded in kind, promising Rs17bn instead that will be used for “imparting training in IT sector”. And of course, distribution of laptops, in addition to promoting exports. The specifics are still awaited.

On the digital payments side, the government has introduced an advance withholding tax of 1pc for filers and 2pc for non-filers from persons remitting money outside Pakistan through credit, debit, and prepaid cards. What that means is if you are paying online on an international platform or a store abroad, there will be an additional tax. How much impact will that have?

Let’s see. In 2021, Pakistan-based e-commerce merchants processed around Rs82.7bn while the customers spent around Rs177bn via cards using the same period. Assuming the entire difference is going towards international platforms, we are looking at Rs94.3bn or over 53pc of the total online expenditure via banking channels.

At the point of sale, most of the spending is local. Of the Rs591.5bn spent via cards in 2021, the throughput for domestic acquirers is Rs558.8bn — so Rs32.7bn went towards international merchants. Combined, we are looking at Rs127bn last year which, if taxed at an average of 1.5pc for simplicity’s sake, will yield the government just over Rs1.9bn. This is of course for last year and the numbers would certainly be higher by double digits in2022-23, but not enough to make a meaningful difference.

Other than that, the budget barely has any mention of the tech sector apart from the amount allocated to the ministry. For 2022-23, an outlay of Rs6.331bn has been set aside, which is almost 33pc lower than the originally budgeted figure of Rs9.361bn for 2021-22 but 43pc higher than the revised Rs4.399bn.

But don’t forget that in times of fiscal constraints (meaning all the time), the first casualty is the federal Public Sector Development Programme.

Published in Dawn, The Business and Finance Weekly, June 13th, 2022

I read an article that server equipment, telecom switches, and other such backend devices have also been taxed now.

Is it true?

 

[ghazi52]

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[ghazi52]

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https://twitter.com/x/status/1537148930395348995

 

[ghazi52]

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[ghazi52]

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KP budget 2022-23​

15 Jun, 2022

EDITORIAL:

The Khyber Pakhtunkhwa (KPK) budget 2022-23 was expected to emphasise the signature programmes launched by the then Prime Minister, Imran Khan, particularly the Sehat Sahulat Card (budgeted to receive 205.7 billion rupees next year against 142 billion rupees in the outgoing year — a rise of 45 percent reflecting the rising use of the card) and Ehsaas programme which never attained the level of a full-fledged programme on paper in the federal budget (its allocation remained subsumed in the Benazir Income Support Programme); however, the provincial budget unexpectedly devoted an entire section to the economic achievements of the federal government during the past three years and a quarter in the document titled Khuddaar KPK: A Citizen’s Guide Part 1.

While this simply reinforces Pakistan Tehreek-e-Insaf’s use of the province to spearhead its national political agenda yet what is significant is that the total outlay for 2022-23 is 1,332 billion rupees against 1,118.3 billion rupees in the outgoing year — a 19 percent rise against the federal budget’s envisaged rise of 10.4 percent, clearly indicating that savings is even less of a priority than in the federal government — a key requirement to contain inflation.


The largest budgeted increase is in salaries, 19 percent — from 374 billion rupees last year to 447.9 billion rupees this year — a raise higher than that proposed in the federal budget; however, sadly, the objective is undoubtedly the same: to gain support of the civilian administration through raising salaries with little if any concern over the impact of such a raise at this time on the Sensitive Price Index which is currently hovering at over 21 percent.

The federal budget has yet to be passed by parliament and amendments are expected though the opposition is expected to be muted with PTI non-attendance following its resignations. Be that as it may, it is fairly evident that the federal government will face an uphill task to ensure that its tax proposals are supported by the International Monetary Fund (IMF), with Finance Minister Miftah Ismail already acknowledging that there are a few thorny issues pertaining to the taxation proposals, particularly those taxes that contribute to the divisible pool that, in turn, are distributed between the federation and the provinces as per the National Finance Commission award.

Additionally, collections of over 600 billion rupees, more than 60 percent envisaged increase in FBR revenue collections for next fiscal year, are projected on the basis of 5 percent growth that is simply unrealistic especially if the Fund’s seventh review is to be successful with Ismail repeatedly stating that the IMF lending is critical to averting default. Whatever amount is collected by the federal government will, therefore, impact on provincial resources as the lion’s share of revenue of all provinces is from their share of the divisible pool.

KPK has budgeted its share from the divisible pool at 570.9 billion rupees for next year based on the federal government’s optimistic estimates of 3.974 trillion rupees, with one percent of the divisible pool for war on terror (budgeted at 68.6 billion rupees), and net hydel profit with arrears that remained pending even during the Khan administration due to lack of fiscal space amounting to 61.6 billion rupees.

KPK’s own resources and non-tax revenue are budgeted at a mere 85 billion rupees for next year. Thus the claim of the KPK government that it will be a balanced budget will depend on the collections under the divisible pool but more importantly indicates its intent not to contribute to the federal government’s budgeted whopping 800 billion rupees provincial surplus.

In descending order of allocations for next year, the largest recipient would be elementary and secondary education at 227 billion rupees, followed by health at 205 billion rupees, with the third highest recipient being home department at 104 billion rupees. Agriculture is ninth in priority in terms of allocation at 29.4 billion rupees though it is more than double the budgeted amount of 13.2 billion rupees in the current year with energy and power next in line at 29.3 billion rupees.

The KPK government envisages allocation of 319.2 billion rupees for development of settled districts and 99 billion rupees for merged districts while current expenditure is projected at 789 billion rupees for settled and 124 billion rupees for merged districts for next year. In percentage terms current expenditure will account for 68 percent of total outlay while development expenditure would account for 31 percent. This compares extremely favourably with 91 percent for federal current expenditure; however, a more meaningful comparison would be with other provincial budgets rather than the federal budget which earmarks the bulk of its expenditure for interest payments and defence...

Copyright Business Recorder, 2022

 

[ghazi52]

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Development projects: Sindh govt criticised for ignoring Hyderabad​

Recorder Report
18 Jun, 2022

KARACHI: The Sindh Assembly on Friday began its post-budget 2022-23 debate, as treasury members lauded their government for placing no new taxes for the next fiscal year, but opposition criticised the financial plan.

MQM’s Nasir Hussain Qureshi criticised the Sindh government for ignoring Hyderabad development and healthcare sector in budgets every year. “It seems Hyderabad is located in Japan and not on Pakistan’s map,” he said.


MQM’s Rashid Khilji said that the NICVD of Hyderabad lacks primary facilities for the patients. The city hospitals also has no facilities to carry out heart surgery. The fire brigade department has rundown extinguishers.