Minister for Finance and Revenue Senator Ishaq Dar Wednesday introduced Rs170 billion’s Finance (Supplementary) Bill 2023 or the “mini-budget” in the National Assembly as the government seeks to fulfil the prerequisites for unlocking the $1.1 billion International Monetary Fund (IMF) loan tranche.
For the revival of IFM’s bailout programme, the government had last night approved hiking the general sales tax (GST) rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes in order to fetch an additional Rs115 billion out of Rs170 billion agreed to by Pakistan in line with the IMF conditions.
Through the “mini-budget”, the Pakistan Democratic Movement (PDM)-led government aims to reduce the budget deficit and broaden its tax collection net — in order to meet the conditions laid forth by the Washington-based lender.
In his address to the lower house, Finince Ministger Dar said that the nation is facing unprecedented crises due to the Pakistan Tehreek-e-Insaf (PTI) government’s “substandard” policies.
“The country, during the Pakistan Muslim League-Nawaz’s (PML-N) previous government, had witnessed economic development and the gross domestic product (GDP) had increased by $112 billion,” he added.
“The PML-N always tries to take fewer loans. Foreign investment had also increased during PML-N’s tenure. In contrast, during the PTI’s government, the loans hit record highs, and a common man’s income also plunged.”
Dar lashed out PTI government led by former premier Imran Khan or mishandling economic affairs of country. He urged on the floor of the House for setting up a National Commission to probe who really damaged the economy of the country.
Finance Minister said PDM government came into power last year and received poor economic conditions.
Dar said the purpose of the bill was to give legislative effect to the taxation proposals of the federal government to stabilize the economy in the aftermath of the recent flood.
The mini budget shall come into force on the next day of assent given to this act by the President Arif Alvi.
Main Points of Finance Bill 2023
- Increases GST from 17 percent to 18 percent
- GST n luxury items has been increased from 17% to 25%
- Farmers to get Rs30 billion loans, Rs6.4 billion subsidy on agricultural machinery, farmers to easy installments loan for solar power tube wells
- Increases FED on first class and business class air tickets
- Increases 2% duty on cement industry from Rs1.5/kg to Rs2/kg
- Increase in federal excise duty on cigarettes, and aerated and sugary drinks
- Govt to receive 10% WTH on luxurious weddings
- No increase in tax on daily commodities
- Govt sets $4 billion target for IT industry
- Benazir Income Support Programme (BISP) to get Rs40 billion additionally
- SBP set agricultural loans target to Rs1819 billion
- Rs30 billion allocated for youth business loan scheme programme
- PM, cabinet to take austerity measures
- PM Shehbaz Sharif to take nation into confidence on Finance Bill 2023
