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Introduction:
Finance Minister Ishaq Dar presented the federal budget for the fiscal year 2023-24, targeting a growth rate of 3.5% for Pakistan’s economy. Emphasizing that this budget should be viewed as a ‘responsible budget’ rather than an ‘election budget,’ Dar highlighted various allocations and measures aimed at driving economic development and addressing key sectors.
Budget Highlights:
Public Sector Development Programme (PSDP):
The PSDP has been set at Rs1,150 billion, including Rs200 billion for public-private partnerships.
Exports and Remittances:
The government projects exports to reach $30 billion and remittances to reach $33 billion in the coming fiscal year.
Duty Exemption on Solar Panels and Batteries:
Customs duty on the import of raw materials used for solar panels and batteries is being removed.
Real Estate Investment Trusts (REITs):
Tax exemptions for REITs have been extended.
‘Diamond Card’ for Overseas Pakistanis:
In addition to the remittance card, a ‘diamond card’ is proposed for overseas Pakistanis who send back over $50,000 to the country.
Youth Scheme:
An allocation of Rs10 billion has been made for providing 100,000 laptops to deserving youth.
IT Services and Freelancers:
The income tax rate of 0.25% has been extended until 2026. IT professionals can import equipment at zero duty up to 1% of their exports, with a limit of $50,000 per year. IT professionals earning up to $24,000 per year are exempted from filing income tax returns. A Rs5-billion Venture Capital Fund will be established to facilitate business capital in the IT sector.
Agriculture:
Rs30 billion has been allocated for converting 50,000 tubewells to solar power. Import taxes and duties on hybrid seeds will be removed. Agri-based industrial units in rural areas with a yearly turnover of Rs800 million will be tax-exempt for five years.
No New Taxes on Industries:
The large-scale industrial sector will not face new taxes.
Current Account and Trade Deficits:
The current account deficit for the outgoing fiscal year is projected to be $4 billion, while the trade deficit is expected to be $26 billion, a decrease from the previous fiscal year.
Economic Performance Review and Criticisms:
Dar reviewed the economic performance during 2013-18, highlighting achievements during the previous government’s tenure. He criticized the previous Pakistan Tehreek-e-Insaf (PTI) government, attributing the current economic crisis to their policies and failure to adhere to commitments made to the International Monetary Fund (IMF). He stated that the incumbent government prioritized saving the country at the expense of political capital.
Conclusion:
Finance Minister Ishaq Dar’s budget speech for the fiscal year 2023-24 outlines the government’s targets and allocations to drive economic growth and address key sectors. The budget emphasizes responsible fiscal management and includes measures to support industries, IT services, agriculture, and overseas Pakistanis. The government aims to stabilize the current account and trade deficits while addressing the challenges inherited from the previous government.
