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Finance Minister Miftah Ismail presented the budget for fiscal year 2022-23 (FY23) in the National Assembly.
In the new budget, the federal government has decided to exempt the import and local supply chain of solar panels and agriculture machinery from sales tax
Key budgetary proposals
No tax on salaries of up to Rs100,000 per month; previously minimum taxable salary was Rs50,000/month
Minimum tax bracket for small business persons to be raised from Rs0.4 million to Rs0.6m
15pc increase in salaries of government employees
Sales tax exemption on import of solar panels and distribution
Advance withholding tax will be collected from those sending remittances abroad via credit, debit and pre-paid cards
Advance tax will be increased on cars above 1,600cc
Exemption of complete custom duty on pharmaceutical ingredients
Rs51bn proposed for education projects
Rs24bn for health sector
People earning an annual income of Rs300 million or more per year are proposed to pay 2pc extra tax
Advance 2pc tax on the value for high-value hybrid and electric vehicles.
The government has budgeted total current expenditure at Rs8,694bn for FY23, which is 15.5pc higher than last year’s budgeted figure.
Defence expenditure is budgeted at Rs1,523bn, which makes up 17.5pc of total current expenditure and is 11.16 per cent higher than last year.
Interest payments, or debt servicing, budgeted for FY23 have risen a whopping 29.1pc from last year to Rs3,950bn — making up the single largest expenditure of the government, which accounts for 45.4pc of total current expenditure.
Total revenue budgeted for FY23 stands at Rs9,004bn. After subtracting provincial transfer of Rs4,100bn as part of the National Finance Commission (NFC) Award, net revenue comes out at Rs4,904bn, nine per cent higher than last year.
The government has set the tax collection target for the Federal Board of Revenue (FBR) at Rs7,004bn for FY23, which is 20.1pc higher than last year’s Rs5,829bn.
