Finance Minister Shaukat Tarin on Friday presented the Rs 8.48 trillion federal budget for fiscal year 2021-22 (FY22) in the National Assembly.
Key announcements during the budget presentation
Rs 900 billion allocated for federal Public Sector Development Program (PSDP) — 40 per cent increase from last year.
Minimum wage has been increased to Rs 20,000.
Rs 12 billion allocated for agriculture sector.
Rs 118 billion for power distribution.
Rs 61 billion for Viability Gap Fund.
Rs 14 billion for Climate Change mitigation projects.
$ 1.1 billion for vaccines procurement.
Rs 100 billion for Covid-19 Emergency Fund.
Rs 12 billion special grant for Sindh.
For Fiscal Year (FY) 2022, the government had set Gross Domestic Product (GDP) growth target at 4.8 per cent.
Large-scale manufacturing sector recorded growth after many years and posted 9 per cent growth during FY-21.
During the fiscal year 2020-21, tax revenue increased and showed 18 per cent growth as tax receipts crossed Rs 4 trillion.
Exports increased by a significant 14 per cent as a rebate, duty drawback helped the sector flourish.
Special economic zones (SEZs) will be used to create jobs which will also ensure growth in exports.
Highlighting PM Imran’s vision of planting trees, he said Rs 14 billion have been allocated for the government’s vision of “One Billion Tree Tsunami.”
Non-tax revenues to rise by 22 per cent during FY-22, meanwhile federal expenditures to rise 15 per cent.
The finance minister said no taxes to be applied on salaried class.
The government decided to reduce sales tax on electric vehicles from 17 per cent to 1 per cent.
Federal excise duty has been reduced from 17 per cent to 16 per cent, he said adding that the withholding tax (WHT) will be reduced by 40 per cent.
The finance minister further added that the WHT on mobile phone services has been reduced from 12 per cent to 10 per cent.
The government plans to further reduce taxes on mobile phone services to 8 per cent.
If mobile phone call duration exceeds three minutes, one rupee per call in addition to the rates of duty will be charged.
For SMS service, ten paisa per sms in addition to the rates of duty will be charged.
Tax on Internet services not approved by the Cabinet. FED reduced to 16 per cent from 17 per cent . IT and IT-enabled services given zero duty regime status. Data storage and Cloud computing included in the definition of IT enabled services .
Withholding tax on oil field services, warehousing services and collateral services have been reduced to 3 per cent from 8 per cent
The Telecom sector will be given industrial status in the fiscal year 2021-22.
The finance minister also announces a one-year customs duty exemption for electric vehicles.
Pensioners will get 10 per cent rise. Integrated allowance for Grade 1-5 has been raised from Rs 450 to Rs 900.