Budget for Fiscal year 2023 / 2024

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Watched by IMF, govt to present budget for new fiscal year shortly​

Finance Minister Ishaq Dar is set to deliver his budget speech to Parliament after 4pm.

Reuters
June 9, 2023

The government is set to present its annual budget to Parliament shortly, aiming to meet the requirements of the International Monetary Fund (IMF) in order to potentially secure the release of additional bailout funds.

The risk of default on sovereign debt is rising, with the economy creaking under twin deficits and record high inflation, which has further dented the popularity of Prime Minister Shehbaz Sharif’s coalition.

Finance Minister Ishaq Dar is set to deliver his budget speech to Parliament after 4pm.

Some budget figures were announced earlier this week, including development spending of Rs1.15 trillion ($4bn), and an economic growth target of 3.5 per cent for the coming fiscal year.

Sources have also told Reuters that preliminary budget proposals envisaged a fiscal deficit of 7.7pc of GDP, with total spending at Rs14.5 trillion ($50.7bn) and revenue collection at Rs9.2 trillion ($32.2bn).

The proposals also set an inflation target of 21pc, well below the record high of nearly 38pc inflation recorded in May.

On Thursday, the IMF said that it has been discussing the budget with the government.

The coalition government is hoping to persuade the IMF to unlock at least some of the $2.5bn left in a $6.5bn programme that Pakistan entered in 2019 and which expires at the end of this month.

“The focus of discussions over the FY24 budget is to balance the need to strengthen debt sustainability prospects while creating space to increase social spending,” Esther Perez Ruiz, the IMF’s resident representative for Pakistan, said on Thursday.

The country missed almost all of its economic targets set in the last budget, most notably its growth target, which was initially set at 5pc, revised down to 2pc earlier this year. Growth is now projected to be just 0.29pc for the fiscal year ending June 30.

Foreign exchange reserves have dipped below $4bn, according to data released by the State Bank of Pakistan (SBP) on Thursday, enough to cover barely a month of imports.

The government has no fiscal space to introduce popular measures that will win it votes or a stimulus to spur flagging economic activity, with limited avenues for raising revenue in the short term and domestic and international debt obligations continuing to mount.

Stakeholders expect tough budget​

Pakistan Business Council (PBC) CEO Ehsan Malik said the government’s ability to lower prices through a reduction in duties and taxes is limited. That’s mainly because the size of taxes and duties is minimal on essential food items, he said.

A second reason is the lack of fiscal space in the budget given that there is a fiscal deficit target that the government must meet to fulfil the conditions set by the IMF.

The main method that it can deploy to buffer the impact of inflation for those who can least afford it is by enhancing the level of support it gives through the Benazir Income Support Programme (BISP). That is also the right way to target assistance, he said.

“I believe there will be a significant increase in the amount set aside for BISP in the forthcoming budget,” he said. In the longer term, the way to deal with inflation in food items is to ensure adequate supplies through improved productivity, safe storage and transportation and by preventing hoarding.

Energy tariffs for domestic consumers are already subsidised by commercial and industrial users. Cross-subsidy makes industry less competitive, he said.

The IMF’s solution to raise tariffs to stem the circular debt is flawed as it does not address the root causes, which are transmission and distribution losses, theft and non-recovery. Provinces have no incentive to come down hard on people who steal or fail to pay their dues, Malik said.

Topline Securities CEO Mohammad Sohail said no major relief for consumers is likely in the budget as the government has very limited fiscal space.

With the global commodity prices dropping, and due to a high base effect, inflation may come down from a record high of 38pc in May, he added.

About the government’s efforts to ensure price stability in the commodity sector amid an uncertain rupee-dollar parity, he said the government can stabilise the rupee and help control inflationary pressure only if it is able to get funding from the IMF.

Karachi Wholesalers Grocers Association (KWGA) Chairman Rauf Ibrahim said he doesn’t expect the budget to be consumer friendly as the government is under pressure from the IMF to raise taxes. “The government will certainly succumb to IMF pressure,” he said.

Instead of giving huge subsidies to the utility stores, the government should consider introducing a rationing system for consumers. In addition, it should make solar power mandatory in all new housing projects, he added.

Watched by IMF, govt to present budget for new fiscal year shortly

Finance Minister Ishaq Dar is set to deliver his budget speech to Parliament after 4pm.

www.dawn.com

 

[ghazi52]

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'Economy linked with political stability':​

PM addresses cabinet before budget reveal​

Premier says 2022 floods caused losses worth $300 billion

Correspondent
June 09, 2023

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday addressed a meeting of the federal cabinet prior to the presentation of the federal budget for the financial year 2024 (FY24) and said that the devastating floods of 2022 caused massive losses.

“We faced $30 billion losses,” he said, adding that the Ukraine war led to a significant increase in commodities prices in the global market, which forced the government to pay billions extra for buying commodities.

Commenting on the International Monetary Fund (IMF) programme, the premier maintained that the incumbent government met the IMF's major conditions but the programme was not yet revived.

He said that he spoke to the Managing Director of the IMF Kristalina Georgieva and on her request Pakistan took a couple of major initiatives to meet the lender’s objectives.

“Before the end of the current month, the IMF board will review Pakistan’s case," the premier detailed.

He continued that China provided immense financial support which was extremely helpful, while Saudi Arabia and the UAE helped fill the gap of the $3 billion requirement from the IMF. The premier maintained that Pakistan was "thankful" for the $3 billion financing commitments from friendly countries.

Shehbaz said the current account deficit improved in the past few months, adding that it reduced to only $3.4 billion, which was "a big relief".

He stated that for the last 14 months, the government since its assumption of power dealt with the challenge of the IMF, the post-flood situation and global inflation.

 

[ghazi52]

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Economy slips into stagflation: Pakistan posts meagre 0.29% GDP growth​

SHAHBAZ RANA
JUN 08, 2023 |



Dar blames IMF ‘drama’ for undervalued rupee; rules out new deal; vows to restore macroeconomic stability

 

[AZ1]

https://twitter.com/x/status/1667136488830828544

 

[Jf Thunder]

well at least the defense budget will be huge.

 

[SD 10]

well at least the defense budget will be huge.

according to news 1804 billion pkr!

 

[ghazi52]

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Budget FY24: What’s likely to get expensive and what’s getting cheaper?​

Syed Talal Ahsan
June 9, 2023

Finance Minister Ishaq Dar presented the budget for fiscal year 2023-24 on the floor of the National Assembly on Thursday amid smooth proceedings with the opposition missing from the benches.

Dar said the government had set a modest growth target and despite being an election year, presented a responsible and balanced budget and not a popular one, with a focus on curbing inflationary pressures.

No new taxes, rise in minimum wage​

The finance minister announced that the government was imposing no new taxes for the upcoming year, the minimum wage was being raised to Rs32,000 from Rs25,000 and the minimum pension was also being raised to Rs12,000.

Furthermore, Dar announced that the government had decided to give 35 per cent ad-hoc relief in the salaries of federal government employees from grade 1-16 and 30pc to grade 17-22 employees aimed at increasing their purchase power, along with an increase in their pensions by 17.5pc.

Apart from that, Dawn.com lists some of the notable changes in taxes/duties introduced by the government in budget 2023- 24 which will interest you.

Dining out made easier​

Dar announced that in a bid to promote digital payments — through debit/credit cards, mobile wallets or QR scanning — at restaurants, the government has reduced the tax rate from 15pc to 5pc.

That means dining out has been made cheaper if one opts for electronic payment methods.

Solar unlocked​

In line with the government’s solarisation initiative, the budget announced an exemption on customs duty on the raw material used in production of solar energy products.

The exemption encompasses essential components such as inverters, solar panels, and batteries, marking a positive step towards promoting renewable energy in the country as the costs of adopting solar energy are likely to go down for the average consumer.

Boost for IT sector​

In a bid to boost IT (information technology) exports, a 0.25pc concessional rate of income tax will be intact until June 30, 2026.

Moreover, freelancers earning up to $24,000 per year will also be exempted from sales tax registration and filing tax returns while a singe page income tax return will be introduced for them.

Additionally, IT and IT enabled service providers will be allowed to import duty-free software and hardware valuing 1pc of their total export proceeds.

Dar said the IT sector was being given the status of an industry which would help it in availing concessional income tax rates.

The government also reduced the sales tax rate from 15pc to 5pc for IT services.

Vehicle imports​

The budget proposes withdrawing the capping of fixed duties and taxes on the import of old and used vehicles of Asian makes above 1300cc, which means they can become more expensive now.

Other notable exemptions​

Among other notable exemptions in customs duties or relief in sales tax, the budget proposed:

• Exemption of customs duties on raw materials of diapers and sanitary napkins.
• Exemption of customs duties on import of shrimps/prawns/juveniles for breeding in commercial fish farms and hatcheries.
• Removal of regulatory duty on second hand clothing.
• Grant of exemption of sales tax on contraceptives and accessories.
• Waiver of 2pc final withholding tax on purchase of immovable property for nonresident individual National Identify Card for Overseas Pakistanis/Pakistan Origin Card holder where immovable property is acquired through foreign remittances remitted from abroad.
• Ten per cent reduction in tax liability or Rs5m, whichever is lower, for a builder and 10pc reduction or Rs1m, whichever is lower, for an individual for own construction of house for three years.

Notable levies​

Conversely, there were some moves which are likely to hurt the common man’s pocket:

• Withdrawal of exemption of sales tax on edible products sold in bulk under brand names or trademarks.
• Enhancement in reduced rate of sales tax from 12pc to 15pc on supplies made by point of sale retailers dealing in leather and textile products.
• Electric power transmission services are proposed to be taxed at 15pc.
• Re-imposition of 0.6pc advance adjustable withholding tax on cash withdrawal for non-active taxpayers.
• Increase in withholding tax rate from 1pc to 5pc on payment to non-resident through debit/credit or prepaid cards. (Two per cent to 10pc for non-active taxpayers).
• Imposition of federal excise duty on energy inefficient fans at Rs2,000 per fan and incandescent bulbs at 20pc of value is proposed.

 

[ghazi52]

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In a nutshell: Another ‘unimaginative’ budget fuelled by debt​

Plans to arrange foreign currency, as envisaged in the budget, seem to be a fantasy at best.

Ammar H Khan
June 9, 2023

The budget announced for the upcoming fiscal year of 2023-24 is not just unimaginative, it has the unique distinction of also being pro-incompetence.

At a time when there was a dire need to reduce the fiscal deficit and bring inflation under control, the budget has effectively been designed to attain moderate-to-low growth, largely funded by debt.

The total outlay for the budget stands at Rs14.46 trillion, more than half of which will effectively be utilised to service debt. Digging deeper, however, it is clear that almost 80 per cent of all taxes that are expected to be collected will be used to pay mark-up payments on existing debt. If net federal revenue is considered, almost 97pc of the same would be used to fund mark-up payments, and debt servicing requirements.

The budget also envisages a marked increase in the allocation for pensions, which now stands at Rs761 billion, while defence expenditure has been increased to Rs1.8 trillion. A potential increase in inflation may lead to further revision in these estimates, resulting in higher spend, and eventually a higher fiscal deficit.

An ambitious Public Sector Development Programme (PSDP) of Rs950 billion has also been announced. However, it remains to be seen how much of it actually materialises given fiscal constraints.

Old debts and new debts​

In essence, all taxes that the sovereign will collect will be used to service debt, while the rest of the government’s expenses will be covered through additional debt. As the sovereign takes on additional debt in an environment where fiscal space is already scarce, there is a potential of increasing interest rates.

To make matters worse, the imposition of 0.6pc withholding tax on cash withdrawals will lead to a potential exodus of deposits from the formal financial system, resulting in an increase in currency in circulation. As the quantum of deposits from the formal financial system reduces, the availability of capital that would be borrowed by the government would become more scarce, resulting in potentially higher interest rates. With the increase in currency in circulation, and the central bank continuing to print more money, it will fuel inflation further.

It is also essential to consider that an increase in wages in the budget will trigger a price-wage spiral, resulting in higher wages across the board, which will further fuel inflation.

Any external shocks related to commodity prices can further exacerbate inflationary pressures, making it difficult to bring the same under control. The budget documents assume an inflation rate of 21pc, which is unlikely to be met considering the inflationary and debt-fuelled nature of the budget.

The additional taxes to be levied in lieu of the super tax will weigh heavily on the already stressed formal sector, which has slumped in recent months, as demonstrated by a contraction in Large Scale Manufacturing (LSM). Imposing additional taxes will further hinder investment, growth and job creation, leading to increased unemployment in an already stressed stagflationary environment.

Overtaxation ultimately results in prices being passed on to the final consumer, resulting in lower sales volumes, lower profitability and ultimately, missed tax collection targets. The formal economy continues to contract, and will be squeezed further due to imposition of additional taxes, while severely constraining any employment growth.

Tax net​

This budget contributed little to the widening of the tax net. The retail, wholesale, and agricultural segment largely remain untaxed, and provide an avenue for currency in circulation to be parked, thereby triggering inflation.

Pakistan has the fastest population growth rate in the world, even higher than the projected economic growth rate. Real incomes for the last five years have stayed stagnant — in such a scenario, the current budget will further strain real incomes, as expected inflation will reduce real disposable income.

The inability to provide the necessary foreign currency liquidity has already caused many factories to close, leading to significant job losses. Plans to arrange foreign currency, as envisaged in the budget, seem to be a fantasy at best, considering the high risk associated with the sovereign at this stage. The inability to close the IMF programme and accelerating availability of foreign currency liquidity will continue to exert pressure on the country’s growth prospects, and make stagflation worse.

Little regard to fiscal discipline​

The context for the current budget was that of a country going through a polycrisis, barely averting an external default, and squeezed by stagflation. A responsible growth strategy would have curtailed fiscal deficit through the expansion of the tax net, while incentivising private sector investment to drive growth, and job creation.

What has been proposed is essentially yet another budget fuelled by debt at historically high interest rates, with little regard given to fiscal discipline.

The inability to understand the unintended consequences of policy actions may push the country towards a potential restructuring of its external and domestic debt, or a potential hyper-inflationary episode.

In both scenarios, the people of the country suffer the most while the game of political musical chairs continues — the music for the people of the country stopped a long time back.

 

[ghazi52]

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In one of unpleasant moments of Pak’s parliamentary history, Finance Minister Ishaq Dar presents annual budget in the National Assembly in absence of entire opposition. Opposition benches present a deserted look. It were the house that was once used to be jam-packed on budget day.

 

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Is Ishaq Dar the right man for the job? Today’s budget may hold a definitive answer​

Stuck in the past​

Editorial
June 9, 2023

FINANCE Minister Ishaq Dar could have kept the Pakistan Economic Survey 2022-23 unveiling ceremony quite short. ‘We blame everyone and everything but ourselves’, would have neatly summarised the gist of most of what he had to say about his government’s report card for the outgoing fiscal year.

It wasn’t difficult to see why he felt a need to be so defensive. The numbers he had to share told a harrowing tale: most key targets were missed, the economy barely kept afloat, inflation had wrecked citizens’ purchasing power, and everything pointed to the prospect of a continuing slowdown in the absence of any unforeseen stimuli.

Perhaps it would have been easier to sympathise had some self-appraisal and reflexivity been on display. After all, even in periods of severe crisis, one can find hope in knowing their future is in the hands of someone who is honest and forthright about the challenges that are being faced.

Instead, Mr Dar’s speech remained politically angled. He mostly kept referring to the good days of his last stint in government, apparently seeking to persuade critics that his ability to manage the economy ought not to be judged on his recent performance but from his ‘achievements’ in his 2013-2017 tenure.






It was a rather facile line of argument, considering he had pushed out Miftah Ismail in the middle of the fiscal year knowing full well that the economy faced conditions vastly different from the last time he was in power.

Interestingly, Mr Dar refused to acknowledge Mr Ismail at all. When he referred to the stalled IMF programme — which, incidentally, he described as the “IMF drama” — Mr Dar conveniently ‘forgot’ that it had been successfully revived by his predecessor.

Instead, he blamed his failure to negotiate with the IMF on the PTI’s decision last year to freeze fuel prices, which he claimed had ‘irrevocably’ damaged the lender’s trust.

By failing to take any responsibility for the economy’s sorry state, Mr Dar insulted the intelligence of those who were anticipating an appraisal of the government’s economic performance in a crisis period.

There is no denying that this was a terrible year, with global crises triggered by the Russia-Ukraine conflict and the catastrophic floods that followed last year’s monsoon ravaging our economy in unforeseen ways.

Mr Dar should have at least detailed the finance ministry’s efforts to address the many challenges faced by the country in this period.

By avoiding that discussion, he only reinforced the perception that he has simply been bumbling from one crisis to another. His enduring fixation with the exchange rate — which made a cameo in his speech yesterday — also suggested that he has learned nothing from past mistakes. Is he the right man for the job? Today’s budget may hold a definitive answer.

 

[ghazi52]

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The dollar has become cheap only in the headlines of the TV channels and the headlines of the newspaper. The dollar is not available in the open market and if it is available, it is available between 313 and 320 rupees. Ishaq Dar and Shehbaz Sharif are sitting contentedly by running their favorite news on TV channels saying that the economy is completely fine, it is amazing.

https://twitter.com/x/status/1666931160188870656

 

[ghazi52]

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Key Features of Pakistan’s Federal Budget 2023-24:
— Size: 14.46 trillion rupees
— GDP targeted at 3.5
— 9.2 trillion revenue target
— 9.50 billions for PSDP
— 1.8 trillion for defense
— Salaries up by 35%
— Pensions up by 17.5%
— Tax exemption for IT
— Sale of new 4G licences in FY23
— 3.5% FED reduced for telecom
— 15% duty on import of tractors
— 10% WH tax on bonus shares
— Heath insurance for journalists
— 17 billions rs for K4 Karachi

 

[ghazi52]

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17.5% increase in pension of govt employees in 2024 budget​

Govt announces ad hoc relief allowance of 35% for grade 1-16 officers and 30% for grade 17-22

Correspondent
June 09, 2023

Finance Minister Ishaq Dar is addressing the budget session in Islamabad on June 9, 2023.
Presenting the federal budget for Fy2023-24, Finance Minister Ishaq Dar announced a 17.5% increase in the pension of government employees.

Unveiling the budget for FY24, the finance minister said “The next fiscal year’s budget will not be an election year budget. It is a fiscally responsible budget,” he said, adding as a precursor that no independent analyst could say otherwise. He stated that the next fiscal year’s budget was made targeting GDP growth of 3.5%.

Dar has claimed that no new tax is being imposed next year to provide maximum relief to the people. He did, however, add that 10% tax was going to be imposed on listed and unlisted companies issuing bonus shares.


Speaking about development projects and goals, Dar explained that in 2017-18 the federal development budget was allocated Rs1.1 trillion and until this fiscal year, such a huge amount has not been earmarked for uplift projects. However, a technical review of Pakistan’s public sector development portfolio by the International Monetary Fund (IMF) found that the Public Sector Development Programme (PSDP) has become “unaffordable” due to limited fiscal space. For FY2023-24, according to the newly revealed budget, 2.6% of the country’s GDP, amounting to Rs2,709 billion will be allocated to PSDP projects for both federal and provincial spending.

He also said the previous government took steps that went against the IMF programme. "Such steps not only pushed up the country’s fiscal deficit but also resulted in worsening of relations with the International Monetary Fund (IMF).”

“We have taken difficult economic steps, which helped Pakistan avert debt default,” Dar said.

“Immediately after coming to power, we tried to restore the IMF programme,” he said.

The minister said that owing to the rupee devaluation and an increase in the SBP’s policy rate, people faced problems, but “we sacrificed our political gains for improving the economy.”

Referring to circular debt, Dar said it increased Rs329 billion per annum during PTI’s rule.

He stated that the government has set Rs9.2 trillion as its target for FBR tax collection where the inflation is set to remain at 21 per cent.

Dar said that the government expected the economy to grow by 3.5 per cent whereas the target for exports in the next fiscal year was $30 billion.

He said that the overseas Pakistanis send remittances equal to 90 per cent of Pakistan’s exports. The government expects them to send $33 billion in FY24.

He said that the tax on overseas Pakistanis for investment in immovable property is proposed to be removed. They would also be provided fast-track immigration facility at the airports.

Dar said that Rs2,709 billion has been allocated to the Public Sector Development Programme (PSDP) for federal and provincial governments whereas Rs1,804b has been allocated for the defence budget.

He said that the customs duty on raw material for batteries, solar panels and invertors is removed, adding that Rs450 billion being allocated under BISP for FY2024.

Dar said that IT and IT-enabled service providers can spend 1 per cent of their export proceeds on importing software and hardware without any duties up to $50,000 per annum.

“IT is being given the status of SMEs, which will have to pay fewer taxes. The government is bringing down sales tax to 5% from 15% for IT services,” he added.

A draft of the federal budget with over Rs6 trillion deficit was prepared and presented to the cabinet for its approval.

The cabinet approved a 30% increase in the salaries of government employees. It has also proposed raising the minimum wage to Rs30,000 per month.

Earlier today, the prime minister addressed a meeting of the federal cabinet prior to the presentation of the budget for the financial year 2024 (FY24) and said that at a time when people are reeling from inflation, salaries of the workforce should be increased. At the same time, pensions should also be raised.

‘Vanilla budget’

Some analysts said the budget was unlikely to impress the IMF. "It is a plain vanilla budget with no path to structural reforms," said Shahbaz Ashraf, chief investment officer at Karachi-based investment firm FRIM Ventures.

On Thursday, the IMF had said it has been discussing the budget with Pakistan with a focus on balancing debt sustainability while creating space to increase social spending.

Mustafa Pasha, chief investment officer at Lakson Investments, said the IMF would likely ask for more measures around revenue collection.

"The budget is unlikely to improve chances of a staff level agreement (with the IMF) in June," he said.

Watched by IMF, Pakistan to present budget amid crises

The government's annual budget will need to satisfy the International Monetary Fund (IMF) to have any chance of securing the release of more bailout money, with the crisis-riven country due to hold elections by November.

The risk of default on sovereign debt is rising, with the economy creaking under twin deficits and record high inflation, which has further dented the popularity of Prime Minister Shehbaz Sharif's coalition ahead of the vote.

PM Shehbaz's government is hoping to persuade the IMF to unlock at least some of the $2.5 billion left in a $6.5 billion programme that Pakistan entered in 2019 and which expires at the end of this month.

"The focus of discussions over the FY24 budget is to balance the need to strengthen debt sustainability prospects while creating space to increase social spending," Esther Perez Ruiz, the IMF's resident representative for Pakistan, said on Thursday.

Pakistan missed almost all of its economic targets set in the last budget, most notably its growth target, which was initially set at 5%, revised down to 2% earlier this year. Growth is now projected to be just 0.29% for the fiscal year ending June 30.

Foreign exchange reserves have dipped below $4 billion, according to data released by the central bank on Thursday, enough to cover barely a month of imports.

The government has no fiscal space to introduce popular measures that will win it votes or a stimulus to spur flagging economic activity, with limited avenues for raising revenue in the short term and domestic and international debt obligations continuing to mount.

 

[Jf Thunder]

according to news 1804 billion pkr!

this is a reward, for a job well done

 

[Pakistan Ka Beta]

,.,.

Budget FY24: What’s likely to get expensive and what’s getting cheaper?​

Syed Talal Ahsan
June 9, 2023

Finance Minister Ishaq Dar presented the budget for fiscal year 2023-24 on the floor of the National Assembly on Thursday amid smooth proceedings with the opposition missing from the benches.

Dar said the government had set a modest growth target and despite being an election year, presented a responsible and balanced budget and not a popular one, with a focus on curbing inflationary pressures.

No new taxes, rise in minimum wage​

The finance minister announced that the government was imposing no new taxes for the upcoming year, the minimum wage was being raised to Rs32,000 from Rs25,000 and the minimum pension was also being raised to Rs12,000.

Furthermore, Dar announced that the government had decided to give 35 per cent ad-hoc relief in the salaries of federal government employees from grade 1-16 and 30pc to grade 17-22 employees aimed at increasing their purchase power, along with an increase in their pensions by 17.5pc.

Apart from that, Dawn.com lists some of the notable changes in taxes/duties introduced by the government in budget 2023- 24 which will interest you.

Dining out made easier​

Dar announced that in a bid to promote digital payments — through debit/credit cards, mobile wallets or QR scanning — at restaurants, the government has reduced the tax rate from 15pc to 5pc.

That means dining out has been made cheaper if one opts for electronic payment methods.

Solar unlocked​

In line with the government’s solarisation initiative, the budget announced an exemption on customs duty on the raw material used in production of solar energy products.

The exemption encompasses essential components such as inverters, solar panels, and batteries, marking a positive step towards promoting renewable energy in the country as the costs of adopting solar energy are likely to go down for the average consumer.

Boost for IT sector​

In a bid to boost IT (information technology) exports, a 0.25pc concessional rate of income tax will be intact until June 30, 2026.

Moreover, freelancers earning up to $24,000 per year will also be exempted from sales tax registration and filing tax returns while a singe page income tax return will be introduced for them.

Additionally, IT and IT enabled service providers will be allowed to import duty-free software and hardware valuing 1pc of their total export proceeds.

Dar said the IT sector was being given the status of an industry which would help it in availing concessional income tax rates.

The government also reduced the sales tax rate from 15pc to 5pc for IT services.

Vehicle imports​

The budget proposes withdrawing the capping of fixed duties and taxes on the import of old and used vehicles of Asian makes above 1300cc, which means they can become more expensive now.

Other notable exemptions​

Among other notable exemptions in customs duties or relief in sales tax, the budget proposed:

• Exemption of customs duties on raw materials of diapers and sanitary napkins.
• Exemption of customs duties on import of shrimps/prawns/juveniles for breeding in commercial fish farms and hatcheries.
• Removal of regulatory duty on second hand clothing.
• Grant of exemption of sales tax on contraceptives and accessories.
• Waiver of 2pc final withholding tax on purchase of immovable property for nonresident individual National Identify Card for Overseas Pakistanis/Pakistan Origin Card holder where immovable property is acquired through foreign remittances remitted from abroad.
• Ten per cent reduction in tax liability or Rs5m, whichever is lower, for a builder and 10pc reduction or Rs1m, whichever is lower, for an individual for own construction of house for three years.

Notable levies​

Conversely, there were some moves which are likely to hurt the common man’s pocket:

• Withdrawal of exemption of sales tax on edible products sold in bulk under brand names or trademarks.
• Enhancement in reduced rate of sales tax from 12pc to 15pc on supplies made by point of sale retailers dealing in leather and textile products.
• Electric power transmission services are proposed to be taxed at 15pc.
• Re-imposition of 0.6pc advance adjustable withholding tax on cash withdrawal for non-active taxpayers.
• Increase in withholding tax rate from 1pc to 5pc on payment to non-resident through debit/credit or prepaid cards. (Two per cent to 10pc for non-active taxpayers).
• Imposition of federal excise duty on energy inefficient fans at Rs2,000 per fan and incandescent bulbs at 20pc of value is proposed.

well at least the defense budget will be huge.

according to news 1804 billion pkr!

https://twitter.com/x/status/1667100239688335360

https://twitter.com/x/status/1667100262119383040

https://twitter.com/x/status/1667100275797008385

https://twitter.com/x/status/1667100285456506881