First financial budget for the fiscal year 2019-20 was presented today in the National Assembly by the PTI government. State Minister for Revenue Hammad Azhar presented the budget in the assembly. He commented that the government has focused on policies to cut down the expenses and increase revenue collection. He added that unprecedented reduction in expenses by both civil and military administration was initiated to support the economy of the country.
The total budget has increased by 30% with Rs.7022 billion, with an anticipated deficit of Rs.3560 billion. Total Development Expenditure is set at Rs.843.4 billion, Civil Government Expenditure at Rs.431 billion, Higher Education at Rs.45 billion and Defense Expenditures are set at Rs.1152 billion.
Other salient features of the budget in order of the speech are as follows:
- Estimated Tax Expenditure Rs.540.98 billion 2018-19
- General Sales Tax remains at 17%
- Brick Kiln Sales Tax reduced from 17% to fixed rates based on location
- Bakeries and Restaurants – No input tax adjustment allowed – GST decreased from 17% to 7.5%
- 10% GST on Concentrated milk powders, cream, flavored drinks
- Bar on the export of PVC and PMC material removed. Zero ratings allowed on exports to Afghanistan and Central Asia
- Additional 2% GST on auto parts and tires/tubes removed
- Decreased 3% VAT on mobile phones
- Restoration of standard 17% GST on zero-rating sectors (textile, leather, carpets, sports goods, and surgical goods)
- Increase in fixed Value of Gas Supplied to CNG Dealers
- Region I 64.80 to 74.04
- Region II 57.69 to 69.57
- Turnover Tax on retailers removed.
- Tier I – 2% of turnover
- Tier II – tax through electricity
- Tax on sugar to increase to 17% from 8%. Additional 3% tax on sale to unregistered person removed
- Reduced sales tax of 10% as per exemption, removed for frozen meat item, cereals, etc
- 1.25 per unit of electricity for Marble Industry as tax
- FED increased from 11.5% to 14% on soft drinks
- 17% FED and Rs.1 per kg tax in lieu of value addition for edible oil and ghee
- 10% FED on Juices and Squashes
- FED increased from Rs.1.5 to Rs.2 per kg on Cement
- FED increased on LNG from 17.18 per 100 cu. m to Rs.10 per MMBTU
- FED on cars
5% – below 1000cc
5% – from 1001 to 2000cc
5% – above 2000cc
- Cigarettes in the upper slab will be taxed from Rs.4500 to Rs.5200 per 1000 sticks
- Cigarettes in the lower slab will be taxed to Rs.1650, while the third lab removed
- Person filing tax return after the due date would not be considered as non-filer
- Removal of restriction on non-filer for transfer of property valuing more than Rs.5 million
- Tax credit for employers who hire fresh graduated up to the amount of the salary paid to them
- Tax Exemption for the following organizations
- LRBT
- The Adjutant General’s Branch, General HQ –Army
- Audit Oversight Board
- Akhuwat
- For Salaried class – tax would be applicable on 600,000 or above per annum
- For Non-Salaried Class – tax would be applicable on Rs.400,000 or above per annum
- 29% tax fixed for the next two years for companies
- The gift from non-relatives to be treated as taxable income
- Depreciation and Brought forward losses not be adjusted for Income for Super Tax
- Reduction of the tax credit on the purchase value of machinery from 10% to 5%
- WHT @ 15% on the gross amount of royalty from resident persons
- Income under Capital Gains to be taxed under the normal tax regime
- Tax on dividend income falling under power generation criteria, to be increased from 7.5% to 15%
- Income from Profit on Debt increased accordingly
- Up to Rs.5 million 10% to 15%
- 5 to Rs.25 million 12.5% to 17%
- Above Rs.25 million 15% to 20%
- Commission paid more than 0.2% of the gross amount of supplies to dealers not allowed unless the dealer is registered
- Payment to be made through banking channel for the purchase of immovable property valuing more than Rs.5 million and moveable property valuing more than Rs.1 million