The budget for 2022-23 is mostly based on regressive measures, with the primary goals of lowering inflation, decreasing the fiscal deficit, and reducing the current account deficit.
The government of Pakistan presented its budget for the next fiscal year 2022-23 in the National Assembly of Pakistan today, on June 10, the last month of the previous fiscal year 2021-22. The finance minister spoke during the nighttime budget speech, and the decision to implement the new budget will take a few days.
Budget speech for FY23 releases Tax Relief and New Taxes.
Tax Relief:
Withholding tax exemption for film distributors and producers. Import and custom duty exemption for filmmaking equipment. Income tax exemption for salaried class with income up to 1.2 million per year. AOPs and Business Individuals to be exempted from income tax for income up to 0.6 million.
Income from Behbood Certificates, Pension Benefit Accounts and Shuhuda Welcome to be exempted from income tax for income up to 0.6 million. Small merchants will be charged a certain sum (ranging from Rs. 3,000 to Rs. 10,000), which will be collected with utility bills.
The withholding tax on raw material imports will be made modifiable. Anyone with fewer than 200 units of power users will be eligible for financing to purchase solar panels.
The sales tax on tractors, agricultural equipment, wheat, canola, and other commodities has been repealed. Free power for not-for-profit hospitals with 50 or more beds. Customs tax exemption on more than 30 active medicinal components
New Taxes:
Anyone owning an immovable property worth more than Rs. 25 million would be taxed at 1% of their fictitious income, plus 5% of their property value. This does not apply to individual residences. A 15 percent capital gain tax is paid on real estate transfers in the first year, which is reduced by 2.5 percent for each additional year the property is held.
The tax on property transfers was raised from 1% to 2% for filers and 5% for non-filers. Individuals, AOPs, and businesses with an annual turnover of more than Rs. 300 million would face a 2% tax.
Banking institutes’ tax to be raised to 42 percent from 39 percent now. International debit and credit card transactions will be taxed with a withholding tax of 1% for filers and 2% for non-filers. For premium automobiles with engines larger than 1600cc, a 200 percent increase in advance tax is suggested.
To read our blog on “15% increase in salaries of Govt. employees announced in budget 2022-23” click here.
