Highlights of the Federal Budget 2023-2024: Relief Measures, Revenue Measures, and Legislative Changes

Introduction:

The federal government has recently announced the budget for the financial year 2023-2024. The budget includes various relief measures, revenue measures, and legislative changes aimed at promoting economic growth, facilitating trade, and encouraging investment in key sectors. This blog post highlights the salient features of the budget and provides an overview of the key measures proposed.

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Guiding Principles:

The budget is guided by several principles, including:

1. No increase in duties on the import of essential items.
2. Trade facilitation and ease of doing business.
3. Encouragement of industrialization and investment.
4. Incentives for the agriculture sector.
5. Promotion of energy efficiency and conservation.
6. Promotion of Information Technology (IT) and IT-enabled services.

Finance Minister Ishaq Dar Targets 3.5% Growth in ‘Responsible Budget’ for 2023-24

Relief Measures:

The budget introduces several relief measures to support various sectors, including:

1. Exemption of Customs duties on specific papers and art cards and boards for the printing of the Holy Quran.
2. Incentives for the Pharma sector by including one more API and 03 drugs in the existing duty-free regime.
3. Exemption of Customs duties on raw materials of Diapers, Sanitary Napkins, and Adhesive Tape.
4. Reduction of Customs duty from 10% to 5% on non-localized (CKD) of Heavy Commercial Vehicles (HCVs).
5. Exemption of Customs duties on the import of seeds for sowing to promote growth in the agricultural sector.
6. Exemption of Customs duties on import of shrimps/prawns/juveniles for breeding in commercial fish farms and hatcheries.
7. Exemption of Customs duties on roasted peanuts for manufacturing of ready-to-use supplementary foods (RUSF) by World Food Program certified manufacturers.
8. Increase of Customs duty on Carbides of Calcium from 3% to 11% to protect the local industry.

Revenue Measures:

The budget proposes various revenue measures to strengthen the country’s revenue base, including:

1. Withdrawal of capping of fixed duties and taxes on the import of old and used vehicles of Asian Makes above 1300 CC.
2. Imposition of an adjustable advance tax on cash withdrawals.
3. Increase in withholding tax rates on the supply of goods and rendering of services.
4. Imposition of additional tax on extraordinary gains due to exogenous factors.
5. Rationalization of Super Tax rates for different income slabs.
6. Re-imposition of withholding tax on non-residents on debit/credit or prepaid card payments.

Legislative Changes:

The budget includes several legislative changes to strengthen customs operations and facilitate trade, such as:

1. Rephrasing the definition of smuggling to enable anti-smuggling operations within the territorial limits of the country.
2. Addition of Provincial Levies and Khasadar Force to assist Customs in anti-smuggling operations in Khyber Pakhtunkhwa and Balochistan.
3. Strengthening penal provisions for smuggling of essential commodities and banned goods.
4. Reduction of mandatory time for filing goods declaration at border customs stations.
5. Enhancement of the warehousing period for perishable items.
6. Provision for adjudication through Customs Computerized System.
7. Simplification of baggage declaration for passengers traveling as a group.

Conclusion:

The budget for the financial year 2023-2024 introduces several relief measures, revenue measures, and legislative changes to promote economic growth, facilitate trade, and enhance revenue generation. The government aims to provide support to key sectors such as IT, real estate, agriculture, and manufacturing while ensuring ease of doing business and encouraging investment. These measures are expected to have a positive impact on the economy and contribute to its development

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