Finance Minister Shaukat Tarin presented the Federal Budget today amid significant noise from the opposition. Total expenditure is to be increased to a record amount of PKR 8.49T an increment of 19% from the previous year. The government also aims to increase tax collection to PKR 5.82T an increase of 17.4%. This budget aims to support growth more than encouraging austerity as done in the past PTI government announcements.
The finance minister set the GDP growth target for 4.8%. This is after the country missed its target for FY21 by a big margin owing to the ongoing global pandemic. It was further announced that Pakistan expects a quick economic recovery and the government wanted to increase the growth target to 6-7% over the next couple of years.
Public Sector Development Program
Spending on public sector development is also going to see a hefty increase. Spending on development has been set at PKR 2.13T which is an increase of 37% from last year. The budget further outlined which sectors would receive how much of the total amount; PSDP receiving PKR900B while provincial PSDP will receive PKR 1,235B. Special packages have been announced to bring infrastructure deprived areas up to speed with the rest of the country.
Several changes were announced in the tax structure for various sectors of the economy. For the relief of the middle class, it was announced that no new taxes are being imposed on the salaried class. The budget also announced special measures to decrease the tax on cars with 850CC engines or lower to bring their prices down. It was also announced that the government aims to bring e-commerce transactions into the sales net.
Social Support Programs
Announcement of continued support for the Kamyab Jawan and Kisan Program was also included. The government will also continue to aid affordable housing through the Naya Pakistan Housing Scheme. Initiatives to support small and medium enterprises were also announced. To further aid small businesses which are considered a backbone of any economy, the government announced that the annual turnover tax ceiling has been increased from PKR 10M to PKR 100m.
The government has also earmarked PKR 172T for response to the Coronavirus. This includes procurement of vaccines and setting up of health care centers across the country.