Pakistan Federal Budget 2023-22 Highlights

Here, on this page we are going to provide you complete information about the Pakistan Federal Budget 2023-2022. The government on Friday presented its sixth and possibly last budget before general elections in 2023, earmarking a total of Rs.5.5 trillion in expenditures for the next fiscal year.For the first time in Pakistan’s history,an elected prime minister and finance minister are presenting their fifth budget.This shows the strengthening of democracy in the country,” the minister said as he began presenting budget on the floor of the National Assembly. Today, the country’s foreign exchange reserves are adequate enough for four months of imports.The GDP growth rate was 5.8% in the outgoing fiscal year the highest in ten years with keeping inflation under 6%, budget deficit at 4.1% and announcing details of the budget strategy as well.

  • Defense budget size would be proposed to nearly Rs 1.050 trillion.
  • Rs 1.550 trillion is likely to be allocated to service debt and principal payment.
  • Govt is expected to propose an increase of 10 to 15 percent in pension and salaries.
  • Rs 220 billion will be earmarked for subsidies.

Pakistan Federal Budget 2023-2023 Highlights

Budget 2023-2019

The government followed a policy of fiscal consolidation because of which fiscal deficit reduced from 8.2% to the current year’s 4.2%. This was achieved through higher revenue collection through improved administration and broadening of the tax base, undoing decades-old concessionary SRO and curtailing non-development expenditure of the government. In fiscal year 2012-13, FBR collection was Rs.1,946 billion. For the current year the target is Rs.3,521 billion. This represents a historic increase of 81% in the last 4 years with average annual growth of 20%.Tax to GDP ratio, which was 10.1% in fiscal year 2012-13, is likely to increase to 13.2% this year, adding the government was targeting tax to GDP ratio of 13.7% in the year 2023-21. Salient Features Pakistan Federal Budget 2023-2023 could be keenly observed further also here as given below.

Pakistan Federal Budget 2023-2023 Features:-

Budget 2023-21 Govt employees, pensioners get 15% increase and keeping foreign exchange reserve levels adequate enough to cover a minimum of 4 months of imports. The foreign exchange reserves stand today at $16 billion, which come up to $21 billion after adding the bank reserves. Tax collection target for the upcoming fiscal year has been set at Rs 3,521 billion, he added.The Federal minister said an investment of Rs.97 billion is being undertaken in the Pakistan Stock Exchange.

Women will be given representation in listed companies as well as representation in boards of governors.The government is aiming to achieve a tax revenue target of Rs4,330 billion, with Rs4,013 billion in taxes collected by the Federal Bureau of Revenue (FBR), and Rs317 billion in other taxes. The non-tax revenue is targeted at Rs979.9 billion.On the expenses side, the government allocated Rs3,477 billion for ‘current expenditure’, and Rs1,275 billion for development expenditure.

Pakistan Federal Budget 2023-2023 current expenditure includes Rs1,363 billion in interest payments, Rs248 billion in pensions, Rs920 billion for defense affairs and services, Rs430 billion for grants and transfers, Rs138 billion in subsidies, and Rs378.8 billion for the running of the government.

Talking about the exports sector, which has showed a negative growth, the minister revealed that the customs duty on the export of raw hides has been suspended. He announced similar measures for stamping foil.

The minister also informed that the present housing shortage in the country is one million, and increasing annually by 0.3 million units. He thus announced a 40% government guarantee on loans up to Rs10,000 from banks and other financial institutions for housing purposes.The sales tax on the commercial import of fabric will be set at 6%.An allocation of Rs49 billion has been made for the health sector.Withholding taxes on the registration of 850CC cars from Rs 10,000 to Rs 7,500, and on the 851CC to 1000CC cars from Rs 20,000 to Rs15,000 and on 1300CC cars from Rs 30,000 to Rs 25,000; however, he reiterated that the incentives are only for the tax-paying customers.

Regulatory duty reduced to 5% on auto parts, fans and utensil manufacturing, he also promised of announcing a package in three months in view of giving relief to the customers on the duty imposed on import of electric cars. Further Recommendations and allocations Pakistan Federal Budget 2023-2023 are going to discuss below as well.

Pakistan Federal Budget 2023-2023 Allocations:-

  • The net revenue receipts for 2023-21 have been estimated at Rs 2,926 billion.
  • The provincial share in federal taxes is estimated at Rs 2,348.2 billion.
  • The net capital receipts for 2023-21 have been estimated at Rs. 552.5 billion.
  • The external receipts in 2023-21 are estimated at Rs 837.8 billion, showing an increase of 2.2 percent.
  • The overall expenditures during the 2023-21 have been estimated at Rs 5,103.8 billion.
  • The share of current and development expenditures respectively in total budgetary outlay for 2023-18, is 73.7 percent and 26.3 percent.
  • The expenditure on general public service is estimated at Rs 2,553.6 billion.
  • The expenditure on general public service is estimated at 2,553.6 billion.
  • The development expenditure outside PSDP has been estimated Rs 152.2 billion.
  • The size of PSDP is Rs 2113 billion Out of this Rs 1112 billion has been allocated to provinces, Federal PSDP has been estimated at Rs 1001 billion,
  • Rs 377.9 billion allocated for federal ministries and divisions
  • Rs 380.6 billion allocated for corporations- Rs 30 billion allocated for Prime Minister SDG achievement programme
  • Rs 40 billion earmarked for special federal development programmes
  • Rs 12.5 billion allocated for energy
  • Rs 12.5 billion earmarked for clean drinking water- Rs 7.5 billion allocated for earthquake reconstruction
  • Rs 5 billion for special provision for competition of CPEC projects- Rs 45 billion allocated for IDPs
  • Rs 45 billion earmarked for security enhancement
  • Rs 20 billion allocated for Prime Minister’s initiatives
  • Rs 25 billion for Gas Infrastructure

Pakistan Federal Budget 2023-2023 meets almost increments subsidies and reliefs in almost all sectors for farmers, employees  as well. To meet expenditure, bank borrowing has been estimated for 2023-21 at Rs 390.1 billion, which is significantly lower than revised estimates of fiscal year 2023-22.

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