The newly formed government of Pakistan Muslim League-Nawaz (PML-N) Wednesday unveiled what is being termed as ‘an investment and business friendly budget’ with a total outlay of Rs3.591 trillion for the financial year 2013-14.
National Debt ramps up
The burden of national debt witnessed a whopping increase of 250 percent to reach Rs14,284 billion.
Pension increased to 10 percent. The minimum pension increased from 3000 to Rs5000
Nominal levy of 0.5 percent should be imposed to movable assets of wealth persons to support income support fund.
Rs75 billion allocated for Income Support Program.
Prime Minister House expenditures are being brought down by 45 percent.
Policy for imported cars
Tax exemption of luxury cars to be abolished
1200 cc hybrid cars exempted from import duty
1200-1800CC hybrid cars: 50% duty reduction.
1800-2500CC hybrid cars: 25 % duty reduction
Tax on purchase of cars/jeeps
Tax in the range of Rs10000 to Rs150000 would be imposed on the purchase of cars and jeeps, the Finance Bill states.
According to Section 231-B of the Finance Bill, Rs10000 tax will be imposed on the purchase of 850cc car/jeep, while Rs150000 tax will be imposed on the purchase of over 2000cc car/jeep.
Similarly, Rs20000 tax will be imposed on the purchase of car/jeep in the range of 851cc to 1000cc, Rs30000 on car/jeep of 1001-1300cc range, Rs50000 on car/jeep of 1301-1600cc range, Rs75000 on 1601-1800cc range, and Rs100000 on 1801-2000cc range.
Rs. 31 billion has been earmarked for the rehabilitation of Pakistan Railways.
railway will be made a independent corporation which will be governed by a board of governors.
signaling system of railway will also be modernized.
Feasibility study to link Pakistan with Afghanistan and China through rail will worked out.
Karachi circular railway project will be launched through Japanese technical and financial assistance.
Decrease in Corporate Tax
It has been proposed in the next budget to decrease corporate tax by one percent each year and bring it to 30 percent in the next five years from the existing thirty-five percent.
Tax exemption in special economic zones would be extended for up to 10 years.
In order to overcome revenue shortage it is proposed to increase stranded rate of sales tax from 16 to 17 percent.
Withholding Tax on functions
Two percent adjustable withholding tax is proposed on the functions held in hotels‚ clubs‚ marriage halls and restaurants.
Industrial and commercial electricity connections
Commercial and industrial electricity account holders will be charged an additional five percent sales tax if they are not registered tax payers. When they are registered this increase will be withdrawn
To ensure receipt of agriculture tax‚ it has been proposed that agriculture credit will only be issued to those growers who pay provincial agriculture tax.
The minimum tax rate is being enhanced from 0.5 percent to one percent of the annual income.
The tax system for salaried persons would be rationalized according to the salaries they receive.
“To rationalize tax on the business persons two slabs are being created under which tax rate from 25 percent will be increased up to 35 percent on the income of Rs6 million”, said he.
New ratio of withholding tax on business imports agreements supplies and services would be imposed to promote corporatization.
- Merchant and traders tax rate to be set at 25 percent.
- New adjustable withholding tax is imposed on foreign films and dramas.
- Adjustable taxes will be levied on small businesses.
- All organizations and autonomous bodies have been asked to freeze secret funds.
- Micro-finance scheme to be launched for youths and mark-up loans will be provided to them.
- Rs 3 billion be allocated for PMs laptop scheme.
- Youths below the age of 25 and holding a masters degree will receive a stipend of 10,000 per month during a one year training program. PM Youth Skill development program will be launched.
- Rs 8 billion allocated for social welfare.
- Ashiana Housing scheme would also be launched in other provinces like Punjab.
- Rs 57 billion allocated for higher education.
- Rs 225 billion of the development budget have been allocated for the energy sector.
- Rs 340 billion earmarked for development projects.
• Total revenue target for 2013-14 Rs 3420 billion including share of provinces of Rs 1502 billion
• PSDP Rs 1155 billion; up by 35.7%
• Forex reserves to be increased to Rs 20 billion by 2016
• Fiscal deficit to be reduced to 4% of GDP by 2016
• Fiscal deficit to be reduced to 6.3% by 2013-14
• Fiscal deficit of 2012-13 likely to be 8.8%
• Rs. 2.59 trillion to be collected as taxes
• Key inflation to be kept in single digit
• GDP growth be raised to 7%
• Tax to GDP ratio to be raised to 15% by 2015
• Investment to GDP ratio to be increased to 20%
• Program to sell state assets to be revised
• Professional managers to run state-run firms
• New saving schemes to be introduced next year
• GST increased from 16% to 17%
• 3G licenses to be auctioned in July
• Outstanding amount of US 800 million from Etisalat for sale of
PTCL to be recovered
• Pensions to be increased by 10%. No raise in salaries.
• Minimum pension raised from Rs 3000 to Rs 5000
• Tax holiday in Special Economic Zones enhanced from 5 to 10 years.
• Rs 59 billion allocated for new water reservoirs
• Rs 225 billion allocated for energy projects
• Circular debt to be addressed in 60 days
• Muzaffargarh, Jamshoro power plants to operate on coal; generate 3120 MW
• Rs 31 billion for Railways restructuring
• Pakistan Railways to be converted into a corporation
• Japan to extend support in revival of Circular Railway in Karachi
• Rs 57 billion for investment on human capital; including higher education, immunization
• Punjab’s Aashiana Scheme to be expanded all over Pakistan
• 1000 Colonies for low income groups; each with 500 houses
• Corporate tax to be reduced in 5 years from 35% to 30%
• Adjustable withholding tax to be imposed on marriages in halls, dramas, entertainment
• Tax slab on salaries up from 25% on Rs 2.5 million to 35% on Rs 6.5 million
• Rs 3 billion allocated for Laptop Scheme for HEC recognised institutions
• PM’s micro finance scheme for soft loans with zero% markup
• Expenditure of PM Office reduced from Rs 726 million to Rs 396 million
• Austerity drive to save Rs 40 billion
• Students with 16 years education to get internship, Rs 10,000 stipend
• Free 6 months vocational training for up to 25 year youth
• Tax on Hybrid vehicles reduced by 100% up to 1200cc;
50% on 1200-1800cc; 25% pm 1801-2500cc
• Number of federal ministries to be reduced to 40
• Rs 2 billion Ramzan package to be offered at Utility Stores
• Ban on purchase of new vehicles in government departments
• BISP to be renamed as Income Support Program; up from Rs 40 billion to Rs 75 billion; stipend increased to Rs 1200
• Rs 5 billion to be allocated for Qarz-e-Hasna for new business.