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Highlights of Finance Minister's budget speech

Published April 27, 2018 Updated April 28, 2018

We have achieved a highest growth in 13 years, low inflationary environment, and overall macro-economic stability. ·

Next government will be free to make changes in the budget priorities. ·

We inherited a collapsed economy, low growth, high inflation and high fiscal deficit. ·

During five years preceding 2013, average inflation was 12pc and average GDP growth was 2.8pc. ·

Last year, government achieved GDP growth of 5.4pc - highest growth rate in last 10 years. ·

For this year, growth is projected 5.8pc - highest in last 13 years. ·Size of the economy expanded from Rs.22,385 billion in FY2013 to Rs.34,396 billion in FY2018. ·

Per capita income increased from Rs.129,005 in 2013 to Rs.180,204. ·

Pakistan’s economy is 24th largest economy in the world. ·

Agriculture sector shows the highest growth in past 18 years of 3.8pc. ·

Industrial production grew by 5.8pc this year. ·

Services sector witnessed a remarkable growth of 6.4pc. ·

Curtailed average inflation to less than 5 percent in the past five years, compared to 12 percent between 2008-13. ·

During current year, fiscal deficit will be contained below 5.5pc of GDP. ·

For current fiscal year, FBR revenue is projected to increase to Rs.3,935 billion. ·

Tax to GDP ratio will increase to 13.2pc this year. ·

Credit given to agriculturalists would increase to Rs.800 billion by June 2018. ·

Credit to private sector has grown by 383 percent, from Rs.93 billion in 2013 to Rs.441 billion by April 2018. ·

During first nine months imports increased by 17pc comparing last year. ·

Foreign Direct Investment increased to $2.7 billion in FY2017 from $1.3 billion in 2013. ·

During the first 9 months of current fiscal, it has increased to $2.1 billion. ·

We expect remittances to increase to more than US$20 billion against $19.3 billion last year. ·

Presently reserves held with SBP stand at $11 billion. ·

This year 8,349 companies were registered till March 2018 compared to 5,883 last year. ·

A total of US$223 billion were invested in the economy from both domestic and foreign sources over the five years. ·

We have added 12,230 megawatts of new generation capacity. ·

Complete tax exemption has been given to people who earn upto Rs.12 lakh per year. ·

Tax will be levied at rate of 5 percent for income between two and four lakhs monthly. ·

People earning above four lakh monthly will be taxed at the rate of 15 percent. ·

Undeclared incomes earned before 30th June 2017 and held as local assets can be regularized on payment of 5pc of the asset value. ·

State is being given the power to purchase land and property at 100pc of the declared value within six-months of its registration. ·Non-filers will be barred from procuring property above Rs.4 million. ·

FBR rate on property is being abolished from 1st July 2018. ·

Provinces have been advised to abolish DC rates. ·

Under budget targets, real GDP growth rate of 6.2pc to be achieved. ·

Inflation to remain below 6pc. Tax to GDP ratio of 13.8pc. Budget deficit of 4.9pc of GDP. ·

Foreign exchange reserves to be increased to $15 billion. ·

FBR tax revenue target is proposed to be fixed at Rs.4,435 billion. ·

Rs.125 billion proposed for Benazir Income Support Programme. ·

Prime Minister’s Youth Scheme will continue. ·

Total size of the PSDP is proposed as Rs.800 billion. ·

All incentives for agriculture sectors shall continue during 2018-19. ·

By 1st July, there will be a reduced uniform GST rate of 2pc on all fertilizers. ·

Setting up of an Agriculture Research Support Fund and Agricultural technology Fund are being proposed. ·

Five export sectors like textiles, leather, sports goods, surgical goods and carpets shall continue to remain in zero-rated sales tax regime. ·

Prize scheme for home remittances is proposed. ·

Three percent custom duty on import of film and drama production equipment. ·

Revolving fund of deserving artists is proposed. ·

Government proposes sea water desalination plant for Karachi. ·

New programme for 100 pc enrollment of children in school being launched. ·

Rs 23.7 billion to be allocated for Diamer Bhasha Dam. ·

Rs 44.7 billion proposed for AJK and Gilgit Baltistan and Rs 24.5 billion for FATA. ·

Rs 90 billion for rehabilitation and reconstruction of IDPs’ homes in FATA.

Property transactions to be recorded on value declared by buyer, seller, to discourage whitening of black money

To cut under-declaring of value of property, FBR notified rates abolished

- 1pc adjustable advance tax from purchaser to replace existing withholding tax on sellers, purchasers –

Provinces requested to abolish provincial rates on stamp duty and collect 1pc on value declared by buyer, seller

– FBR gets right to buy back property by paying 100pc over declared value property

-Non-filers, not permitted to buy property with declared value exceeding four million rupees

-     Super Tax rate to be reduced by 1pc for banking and non-banking sector

-     Corporate Tax to be reduced from 30pc in 2018 to 25pc in 2023

-     Rate of tax on dividends of Real Estate Investment Trust cut from 1.5pc to 7.5pc

-     Rate of withholding tax from non-filers to be reduced from 0.6pc to 0.4pc on bank transactions

-     Threshold for tax deduction on payments for goods and services enhanced to Rs 30,000 and 75,000 respectively

-  10 years income tax exemption for refineries with capacity of 100,000 barrels per day

-     Aziz Tabba Foundation, Saylani Welfare and Al-Shifa trust get tax exemption

-     Withholding Tax on non-filers up from 7pc to 8pc in case of company, and 7.75pc to 9pc in non-corporate case

-     Tax of Rs 1000 on income between Rs 400,000 to Rs 800,000 and Rs 2000 on income from Rs 800,000 to Rs 1200,000

-     Rate of Sales Tax be reduced from 17pc to 12pc on RLNG

-     10pc Sales Tax on fish feed removed

-     Sales Tax on agriculture machinery reduced from 7pc to pc5

-     Exemption on 21 types of computer parts imported by manufacturers to be removed to encourage local assembly

-     Zero rating for stationery items be restored

-     Value addition tax of 3pc on import of second hand clothing, footwear excluded

-     Further Tax rate increased from 2pc to 3pc

-     Federal Excise Duty on locally produced cigarettes enhanced ro Rs 3964, Rs 1770 and Rs 848 per thousand cigarettes

-     Customs Duty of 3pc on import of bulls withdrawn

-     Customs Duty on import of feed for livestock reduced from 10pc to 5pc

-     To address issue of physical, mental stunting in children 3pc duty on import of micro feeder equipment withdrawn

-     5pc customs duty on on cancer drug Tasigna withdrawn

-     Customs Duty of 11pc on corrective eyesight glasses reduced to 3pc -    Regulatory Duty on import of optical optical fibre cable reduced from 20pc to 10pc

-     Duty on optical fibre cable and raw material cut to 5pc -   Customs Duty on Acetic Acid cut from 20pc to 16pc, on import of plasters cut from 16pc to 11pc

-     Customs Duty on Carbon Black rubber grade for tyres cut from 20pc to 16pc

-     Customs Duty on silicone electrical steel sheets for transformers reduced from 10pc to 5pc

-     Duty on import of electric cars to be reduced from 50pc to 25pc, besides exemption from regulatory duty of 15pc

-     Import of CKD kits for assembly of domestically produced electric cars proposed at 10pc

-     Customs Duty on LED parts and components of 5pc withdrawn - To promote use of electric vehicles 16pc duty on charging stations withdrawn

-     Customs Duty cut from 20pc to 11pc on pre fabricated structures for hotels, motels in hill stations

-     BISP funding increased to Rs 124.7 billion, stipend up from Rs 3000 to Rs 4,834

-     BISP beneficiaries to get one-time cash grant of Rs 50,000 to start business under NPGP

-     Rs 688 million allocated for Pakistan Poverty Alleviation Fund -  Rs 3.5 billion for PM Interest Free Loan under PPAF

-     10pc increase in pay, pension of government civil military employees

-     House rent ceiling, allowance increased by 50pc

-     Minimum Pension up from Rs 6000 to Rs 10000

-     Minimum Pension for pensioners above 75 now Rs 15000

-     Rs 12 billion allocated for Advances to govt servants for house building, transport

-     Rs 5 billion for Senior Officers Performance Allowance

-     Relief for widow borrowers from House Building Finance Corporation increased from Rs 0.35 million to Rs 0.6 million

Copyright APP (Associated Press of Pakistan), 2018