(MENAFN- Tribal News Network) Muhammad Faheem The federal government has unveiled a budget for the fiscal year 2023-24, amounting to over 14,460 billion rupees. This marks a significant increase of 4,958 billion rupees compared to the previous year's budget of 9,502 billion rupees. The budget has expanded by 34 percent within a year, representing more than a third of its previous size.
To meet the expenditures outlined in the budget, the government has heavily relied on taxes. While the previous year's budget stood at 9,502 billion rupees, only the tax collection target for the upcoming fiscal year is set at 9,200 billion rupees. The Federal Board of Revenue aims to collect 3,759 billion rupees in direct taxes, with an additional 5,441 billion rupees expected from indirect taxes.
In addition to taxes, the government aims to generate additional revenue of 2,963 billion rupees. The budget deficit, which stood at 4,598 billion rupees in the previous fiscal year, has now risen to 7,573 billion rupees. This deficit constitutes more than 52 percent of the total budget, marking a 4 percent increase from the previous year's deficit, which accounted for 48 percent of the budget.
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Remarkably, the presentation of the budget has taken place without any opposition for the second consecutive year, as both the PDM and the coalition government stand united. While the government parties hold majority seats, members of the opposition, including the Grand Democratic Alliance and PTI, are present in the house to maintain the opposition's existence. Last year, Miftah Ismail presented the budget in a modest manner, and this time Ishaq Dar smoothly presented the budget without encountering any obstacles.
Extension of Customs and Sales Tax Exemption in Tribal Areas until June 2024
The budget has included a significant provision regarding the extension of the sales and customs tax exemption in provincial and federally administered tribal areas. This exemption, which grants relief from taxes, has been extended for an additional year, ensuring its validity until June 2024. Furthermore, there is a proposal to incorporate Levies and Khashadars, which play crucial roles in maintaining law and order, into the customs support agencies to combat smuggling effectively.
To facilitate this extension, amendments have been made to the Customs Act of 1969 and the Sales Tax Act of 1990. Consequently, the exemption on imported machinery and equipment in the former FATA and PATA regions will continue until June 2024. Additionally, there is a recommendation to include provincial levies and special forces as mandatory government agencies, providing necessary assistance to Customs in their anti-smuggling endeavors in Khyber Pakhtunkhwa and Balochistan.
In an effort to intensify anti-trafficking operations and strengthen penalties for the smuggling of essential commodities, enhanced measures are proposed for Khyber Pakhtunkhwa and Balochistan. These steps aim to enhance the effectiveness of anti-trafficking efforts and deter those involved in smuggling from engaging in such illegal activities.
Increase in Duty on Jaggery Import and Abolition of Sales Tax on Electricity
The National Tax Council has made important decisions regarding taxation, aiming to optimize the system and promote certain sectors. One of the significant proposals is the exclusion of sales tax on the generation, transmission, and distribution of electricity. This move is intended to provide relief to consumers and encourage the use of electricity. However, a tax of 15 percent will be imposed on electric power transmission services to ensure appropriate revenue collection.
To discourage the use of inefficient tungsten filament incandescent bulbs, a 20 percent regulatory duty has been introduced on these bulbs and their components. This measure aims to encourage the adoption of energy-efficient alternatives and contribute to sustainable energy practices.
In order to promote domestic industries and exports, the export regulatory duty on jaggery has been increased from 10 to 15 percent. This adjustment aims to protect local manufacturers and incentivize the export of jaggery products.
In an effort to support the renewable energy sector, the import of machinery, equipment, and inputs required for the manufacturing of inverters and batteries for solar panels and related equipment has been exempted from customs duty. This exemption aims to facilitate the growth of the renewable energy industry and promote the adoption of sustainable technologies.
Recognizing the importance of the information technology sector, duty-free import of IT and related equipment will be allowed up to one percent of their export earnings. This move encourages the development of the IT industry and facilitates access to advanced technology for businesses operating in this sector.
To promote growth in the agricultural sector, customs duty exemptions have been granted on the import of seeds for sowing. This measure aims to support farmers and enhance agricultural productivity by providing access to high-quality seeds.
Import of prawns for breeding purposes in commercial fish farms and hatcheries will also be exempt from customs duty. This exemption aims to encourage the development of the aquaculture industry and boost local production.
In support of humanitarian efforts, customs duty exemption has been granted on roasted groundnuts used for the manufacture of ready-to-use supplementary foods by certified manufacturers of the World Food Program. This exemption facilitates the production of nutritious food items to address food security challenges.
To streamline trade and reduce barriers, the regulatory duty on the import of used clothing has been abolished. This decision aims to promote affordable clothing options and simplify import procedures.
Sales tax exemptions have been introduced on various items, including contraceptives, planters, combine harvesters, dryers for agricultural products, no-till direct seeders, planters, transplanters, and bovine seeds. These exemptions aim to support agriculture and improve access to essential goods.
Overall, these adjustments in duty and tax exemptions reflect the government's commitment to fostering economic growth, promoting sustainable practices, and supporting key sectors of the economy.
Allocation of 57 Billion Rupees for Merged Districts in Development Program
The federal government has unveiled a historic development program for the fiscal year 2023-24, making it the largest in history. The combined development budget for provinces and the federation will amount to 2,709 billion rupees. The public sector development program has been estimated at 1,150 billion rupees, with an additional 200 billion rupees set aside for private sector investments.
Within the Public Sector Development Program, 80 percent of the funds will be allocated to ongoing development projects that are scheduled for completion by June 2024.
Notably, an allocation of 57 billion rupees has been specifically designated for the merged districts of Khyber Pakhtunkhwa. Additionally, 32 billion 50 crore rupees have been earmarked for Azad Kashmir and 28 billion 50 crore rupees for Gilgit-Baltistan.
In terms of the social sectors, 244 billion rupees have been allocated for development, including 82 billion rupees for higher education, 26 billion rupees for healthcare, 34 billion rupees for science and information technology, and 50 billion rupees for the development of minerals and agriculture sectors.
Furthermore, a significant allocation of 107 billion rupees has been made for the improvement of the power transmission system. This includes funding for various electricity production projects, such as 12 billion rupees for generating 1,200 megawatts of power from the Jamshoro Power Plant, 16 billion rupees for the construction of a 500 kV transmission line between Pakistan and Uzbekistan, and 5 billion rupees for the enhancement of existing grid stations.
Additionally, 13 billion rupees have been allocated for the Suki Kinari, Kohala, and Mahl hydro plants, while 6 billion rupees have been set aside for the transmission of electricity from the Dasu hydropower plant.
Other notable allocations include 10 billion 50 crore rupees for the completion of the Mohmand Dam, 59 billion rupees for the Dasu Hydropower Project, 20 billion rupees for the Diamir Bhasha Dam, 4 billion 80 crore rupees for the Neelum Jhelum Hydropower Project, and 4 billion 50 crore rupees for increasing the capacity of Tarbela. Additionally, 2 billion 60 crores of rupees have been earmarked for the maintenance of the Warsak Power Station.
These significant allocations underline the government's commitment to regional development, social progress, and the improvement of the power infrastructure. The development program aims to uplift marginalized areas, enhance educational opportunities, improve healthcare services, promote scientific advancements, boost agricultural productivity, and strengthen the power sector to meet the growing energy demands of the country.
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