Finance Minister Ishaq Dar introduced the budget for the fiscal year 2023-24 (FY24) to the National Assembly, promising no new taxes for the coming year. The government anticipates a modest 3.5 percent GDP growth for next year.
Finance Minister claims that the budget is grounded in practical economic considerations rather than election incentives.
The International Monetary Fund (IMF) has reviewed Pakistan’s budget figures, and Dar is confident they satisfy the lender’s program requirements. The minister stressed the importance of agriculture to the economy and outlined measures to boost the sector, such as expanding agri loans from Rs1.8 trillion to Rs2.25 trillion.
Read: Finance Minister Ishaq Dar Set to Present Rs14.7 Trillion Federal Budget for FY 2023-24
Key propositions for the 2023-24 Budget include:
- No hike in duties on the import of essential goods or additional taxes for the upcoming year
- Abolition of customs duties on seed imports for sowing to stimulate agricultural growth
- Capping of fixed duties and taxes on the import of used vehicles over 1300CC from Asian makers lifted
- A 5% tax is proposed on services provided by eateries, cafes, and similar outlets if payment is made via debit or credit cards, mobile wallets, or QR scanning.
- Tax exemption on contraceptives and accessories
- Minimum wage set at Rs32,000; a 35% and 30% salary increase for government employees in Grades 1-16 and 17-22, respectively
- Withholding tax rate increase from 1% to 5% on payments to non-residents via debit/credit or prepaid cards
- Rs 1 billion dedicated to health insurance for working journalists
- Customs duties exempted on raw materials for diapers and sanitary napkins
- A 5-year tax break for small and medium-sized agro-based industries established after July 1, 2023, from the 2024 tax year to 2028
- Duty-free import of IT-related equipment equivalent to 1% value of their export proceeds as an incentive for IT and IT-enabled service exporters
- The requirement of shop area for tier-1 retailers proposed to be abolished
- Increase in the monetary limit of foreign remittance sent from outside Pakistan from Rs5 million to the rupee equivalent of $100,000
- Super Tax rationalized under section 4C to apply to all persons earning over Rs150 million across the board; inclusion of three new income slabs to be taxed at 6%, 8%, and 10% respectively.”
