Finance Minister Miftah Ismail unveils budget for fiscal year 2022-23 in NA
Finance Minister Miftah Ismail unveils budget for fiscal year 2022-23 in NA
ISLAMABAD (Dunya News) - The federal budget worth more than Rs 9,000 billion for the fiscal year 2022-23 has been unveiled today. Federal Minister for Finance and Revenue Miftah Ismail presented the budget in the National Assembly.
Addressing the National Assembly, the minister started his speech by pointing out "mistakes by the previous government". "Each year, the budget was presented by a different person," he said.
The minister said that due to the previous government, the IMF programme, which should have ended this year, got suspended in February, and basic reforms that should have taken place in 2019 were not implemented.
The poor-income group needs to be supported, he said and added this group buys goods that are produced in the country.
"Bringing economic stability is our top priority. The basic problem of our economy is that a growth rate of 3-4% doesn t help our growing population, whereas a growth rate of 5-6% leads to a current account deficit."
He criticised former PM Imran Khan by saying that he never cared for the poor for he himself said that “keeping a check on potato and tomato prices is not a PM’s job”. The minister said that Budget 2022-23 will focus on providing facilities to farmers growing crops that produce cooking oil, like corn and sunflower, so that the country doesn’t have to import palm oil, which is touching a record high in international market.
According to Miftah Ismail, the PTI-led govt took loans of Rs20,000 billion during their tenure. “This is 80% of the total loans taken since the time of Liaquat Ali Khan.” This was because they spent more than they earned, he added.
Rs3,950 billion allocated for debt servicing in FY23
Rs1,523 billion for defence expenditure
Rs550 billion for civilian administration
Rs530 billion for pension expenditure
Rs699 billion allocated as subsidies
Rs1,242 billion allocated as grants
Rs699 billion allocated for targeted subsidy
Rs65 billion for Higher Education Commission (HEC) and Rs44 billion for its development
Rs17 billion allocated to the IT sector
Rs21 Billion allocated for Benazir Nashunuma Program
Rs800 billion allocated for PSDP
Rs364 billion allocated for Benazir Income Support Program
Rs10bn allocated for improvement of climate projects
Rs202bn allocated for Transport & Communications sector
Govt allocates Rs 600 mln for Religious Affairs & Interfaith Harmony Division
Rs11 billion allocated for Agriculture
Rs25.99 billion allocated for Atomic Energy Commission
Rs10.12 billion allocated for food security
The Finance Minister said austerity is the top priority of the present government. Reducing government s expenditure is part of this budget and we are taking concrete steps in this regard. He said there will be complete ban on purchase of vehicles. Except, development projects, there will also be a ban on procurement of furniture and other items. The petrol quota of cabinet members and government officials will be reduced by 40 percent. There will also be ban on foreign tours under government expense, except the important ones.
Miftah Islamabad said that a family with household income of less than Rs40,000 will be given a transfer of Rs2,000 every month.
Ismail said that the government is aware that the common man is struggling with high prices and we are doing are best to bring them down.
“Inflation has been high, but for next year, the target has been set at 11.5%,” he added.
The minister said the government had to move towards "sustainable growth", adding that the growth target for next year was set at 5 per cent. He said the tax to GDP ratio is estimated to the increase to 9.2 percent from the current 8.6 percent during the next financial year. He recalled that we had left this ratio at 11.1 percent in the year 2017-18. He said the overall deficit which currently stands at 8.6 percent will be gradually brought down. This will be brought down to 4.9 percent in the next fiscal year. Similarly, the overall primary balance which is currently -2.4 percent of the GDP will be improved to 0.19 percent.
The Finance Minister said the imports, which are expected to be 76 billion dollars during the current fiscal year will be reduced to 70 billion dollars in the next financial year. At present, exports are 31.3 billion dollars, which will be enhanced to 35 billion dollars in the next fiscal year. The current account balance will be reduced to -2.2 percent of the GDP from the current -4.1 percent.
Miftah Ismail said that the scope of Benazir Education Stipend Programme will be expanded to ten million children. Over 35 billion rupees have been proposed for this programme. Ten thousand more students will be given Benazir Undergraduate Scholarship at a cost of nine billion rupees. The network of Benazir Nashonuma Programme will be expanded to all the districts, which will cost about 21.5 billion rupees. Besides, six billion rupees have been set aside for Pakistan Bait-ul-Mal for the medical treatment and assistance of deserving families.
The Finance Minister said the budget of BISP has been increased to 364 billion rupees for the next fiscal year. In addition, 12 billion rupees have been allocated for provision of subsidy on essential commodities through Utility Stores Corporation. An additional amount of five billion rupees has been set aside for Ramadan Package.
The Finance Minister said the facility of Benazir Kafalat Cash Transfer Programme will be available to nine million deserving families under BISP in the next fiscal year. For this, 266 billion rupees have been reserved.
The Finance Minister said that the energy sector has pivotal importance for the people as well as the industries and trade. For these sectors and the people we gave an additional subsidy of 214 billion rupees. He said 573 billion rupees have been earmarked in the next financial year so that the people could afford the electricity in the harsh weather of summer. He said we released 248 billion rupees for the payment of outstanding amounts in the petroleum sector and 71 billion rupees will be provided in the next fiscal year. He said we will soon announce the new gas tariffs which will be aimed at providing gas to the industries at competitive rates which will help in bolster exports.
Higher Education Commission
The Finance Minister said we have earmarked 65 billion rupees in the current budget for Higher Education Commission. In addition 44 billion rupees have been allocated for the development schemes of the HEC which is 67 percent higher than the previous year. He said this is manifestation of our commitment towards the youth. He said we are encouraging the provinces to fully fulfill their responsibilities regarding promotion of higher education in the coming years. The HEC budget envisages five thousand scholarships for the students of Balochistan and tribal districts. He said a separate scholarship scheme has also been included for the coastal areas of Balochistan.
The Finance Minister announced to provide one hundred thousand laptops on easy installments to the students across the country. Funds have also been allocated for provision of state of the art equipment to upgrade education of engineering and technology.
The finance minister announced that owing to the high inflation in the country, the government has increased salaries for its employees by 15 per cent, adding that the pensions have also been raised by 5 per cent.
The minister said that FBR revenue has been estimated at Rs7,004 billion for the next fiscal year. “This includes Rs4,100 billion share of provinces. The net revenue with the federal government will be Rs4,904 billion. The non-tax revenue will be Rs2,000 billion.”
He said that the petrol quota of cabinet members and government officials will be reduced by 40 percent. “There will also be ban on foreign tours under government expense, except the important ones.”
Slab for salaried class
He said the tax exemption slab for salaried class has also been increased from 600,000 rupees to 1.2 million rupees. This step will be benefit the salaried people and enhance business activities. The slab for business individuals and associations of persons has been increased from 400,000 rupees to 600,000 rupees.
He said tax on profit of Saving Certificates, Pensioners Benefit Accounts and martyrs family welfare accounts has been slashed from 10 to 5 percent.
Miftah also shared that the government has suggested increasing the tax on banking companies to 39%, including 42% super tax, while the foreign nationals doing business in Pakistan will have to pay taxes.
The finance minister also proposed to increase the tax rate on non-filers from 100% to 200% for vehicles having horsepower greater than 1,600cc. The government has also proposed an advance tax on 1,600 cars and a 2% additional tax on electronic engine cars, he said.
The government has also suggested revising the tax slab for salaried people and increased the cap to Rs100,000.
Miftah said the tax imposed on Behbood Saving Certificate and Pensioners Benefit Account has been proposed to be dropped to 5% from 10%.
The tax on small-scale retailers has been proposed to be fixed, which will range from Rs3,000-10,000 and will be collected through their electricity bills, said Miftah.
It has also been suggested that the filers who send money abroad through credit, debit, or prepaid cards will have to pay 1% withholding tax, while for a similar transaction, non-filers will be charged 2% tax, he said.
Finance Minister Miftah Ismail said an industrial policy is being introduced in collaboration of Asian Development Bank to strengthen industrial base of the country. He said the Prime Minister has directed to immediately clear all claims of exporters. At present, an amount of 40.5 billion rupees is payable to them and we will pay this amount forthwith. Despite, financial difficulties sales tax refunds are also being released immediately. He said that Industrial feeders have been exempted from load-shedding to ensure uninterrupted power supply to the industrial sector.
Miftah Ismail said a new strategy is being evolved for the promotion of investment in the country. He said the policy is aimed at providing an enabling environment to the investors by doing away with the complex procedure. He said that our government will bring reforms in dispute resolution mechanism to facilitate domestic and foreign investors. He said that it will be ensured that this mechanism is simple and effective. For this purpose, best international practices will be adopted. He said these reforms will be introduced in consultation with judiciary so that these could be implemented immediately.
Miftah Ismail said that 21 billion rupees have been earmarked to enhance production of crops and livestock. He said that Ministry for Food Security has prepared a three year growth strategy in collaboration with Planning Commission and provinces. This strategy is aimed at enhancing agri-production, making the farmers prosperous, promoting smart agriculture and self-reliance.
The Finance Minister announced formation of National Youth Commission in order to exploit the potential of the youth. He said various schemes have been proposed for the youth. He said a coordinated system is being introduced to enhance the role of educated youth in the country s development. He said more than two million job opportunities will be provided to the youth through youth employment policy. He said a scheme will also be started to promote youth entrepreneurship under which interest free loans of up to five hundred thousand rupees and loans up to twenty-five million rupees will be provided on easy installments. He said that twenty-five percent quota has been fixed for women in this loans scheme. He said that women will be given training on priority basis in hi-tech in order to ensure the economic empowerment. He said youth development centres will be established across the country.
The Finance Minister said that a green youth movement will be started in order to engage the youth in activities aimed at environment protection. Funds will be set aside to provide laptops on merit and on installments besides 250 mini-sports stadium will be constructed in the country. He said that an innovation league will be introduced in order to enhance the capabilities of the youth. He said a talent hunt and sports drive programme will be framed for the youth in the age bracket of eleven and twenty-five years.
The Finance Minister said that the film has been given the status of an industry as per the film and culture policy 2018. He said a binding film finance fund is being established to promote this industry. He said a medical insurance policy is being started for the artists.
Miftah Ismail said a tax holiday is being given to film makers while tax rebate for the same period will be given to new cinema houses, production houses and film museums. Tax rebate of ten years will also be given for the export of films and dramas while income of cinema and producers is being exempted from income tax. He said a National Film Institute and Post Film Production facility besides, National Film Studio are being established at a cost of one billion rupees. He said foreign film makers will be given rebate for entering into joint ventures of films and drams at the domestic level. He said eight percent withholding tax is being waived off on distributors and producers. He said that custom duty exemption of five years will be given for the import of machinery and equipment for films and dramas.
He said that entertainment duty is being abolished and sales tax is being brought to zero for the purchase of equipment related to films and dramas. He was confident that these steps will help revive the film industry and encourage the new talent to join this field.
Presenting the development priorities, the Finance Minister said we will focus on the on-going projects so that the money spent on them is not wasted. He said that most of the funds are being spent for the development of Balochistan in order to bring at par with other regions. He said PSDP allocation for the provinces, Azad Jammu and Kashmir and Gilgit Baltistan has been enhanced to 136 billion rupees. He said water reservoirs are our top priority. He said additional amounts have been earmarked for the early completion of Mohmand and Diamer Basha dams as per the direction of the Prime Minister Shahbaz Sharif. He said road infrastructure connecting our ports with the Chinese border will be completed. He said emphasis will be given to the National Development and promotion of exports by accelerating work on Special Economic Zones and infrastructure under the CPEC.
Finance Minister said that infrastructure development has been our priority keeping in view the requirements of the country. For this purpose, 395 billion rupees have been allocated.
The Minister said a total amount of 183 billion rupees has been set aside for various projects pertaining to energy and water resources. He said that 202 billion rupees has been proposed for roads and ports. He said construction of the roads will be promoted in cooperation with the private sector.
Federal budget 2022-23