Highlights of the Federal Budget 2017-18

Highlights of Budget 2017

Finally, the government has unveiled the budget 2017-18, sealing the economic fate of Pakistan for the coming year. Finance Minister of Pakistan, Muhammad Ishaq Dar standing in front of National Assembly today, presented the much-awaited federal budget for the fifth time.

Let’s review the budgetary proposals by the federal government:

In the last year of the sitting government’s power, PML-N has introduced the new budget of Rs 5.103 trillion where 2.113 trillion has been reserved for the Public Sector Development Program, which is 26.14% more than the last year’s allocation. For the upcoming fiscal year, the government has set a target of more than 7% Gross Domestic Product (GDP).

Read More: Complete Overview of Rs 4.75 trillion Federal Budget 2017-18

Information Communication Technology

  • Information Technology and Telecom Division: Rs. 1. 538 Billion
  • IT Park in collaboration with South Korea: Rs, 6 Billion
  • New IT companies are exempted from tax for 3 year
  • No Sales Tax on IT exports
  • Withholding Tax on mobile calls reduced from 14% to 12%
  • Sales Tax on mobile phone calls is reduced from 18% to 17%
  • Reduction in customs duty on Latest Smartphones from Rs. 1000 to Rs. 650
  • Withholding Tax on branchless banking is abolished
  • Establishment of e-payment gateway by SBP: Rs. 2 billion
  • Customs Duty on telecom sector’s Imported Equipment: 9%
  • Import duty on Set top boxes will stay at 11% for another year and so will the sales tax of 5%

Read More: Government has deceptively doubled the duties and taxes on mobile phone import

Education

  • Higher Education Commission (HEC): Rs. 38.5 Billion

Salaries

  • Minimum Wage increased from Rs. 14000 to Rs. 15000
  • Increase in salaries of government employees: 10% Adhoc
  • 10% increase in pensions of retired government employees and army personnel
  • 20% increase in salaries of armed forces personnel

Read More: No Tax on Tech Companies and Startups in Pakistan; Budget 2017-18

Taxes & Duties

  • The target for Tax Collection By FBR: Rs. 3.5 trillion
  • Sales Tax on commercial import: 6%
  • Corporate Tax will be reduced by 1%: now is 30%
  • Increase in Federal Excise Duty on Cigarettes
  • 5% Withholding tax on tobacco production
  • Increase in insurance premium from Rs. 0.2 million to Rs. 0.3 million

Read More:Government reserves Rs 20 billion for Youth Programs; Budget 2017-18

Youth Development Projects

  • Skill Development, Laptop and Youth Program: Rs. 20 Billion

Loans Schemes

  • Loans for poor to start their own business: Rs. 50,000
  • Reduction from 14-15% markup to 9.9% on agriculture loans from NBP and Zarai Traqiati Bank for people with 12.5-acre land
  • Increase in number of families from 3.7 million to 5.5 million in the Benazir Income Support Programme (BISP)
  • Fund to be established to grant small loans
  • Super Tax will stay for another 1 year
  • Advance Tax will be imposed on people with Rs. 85,000 and more monthly income
  • Government will write off loans of widows amounting to Rs. 500,000
  • Women Empowerment

    • Through Companies Bill, women will now feature on the board of directors of the brokerage firms

Read More: SBP to establish e-payment gateway worth Rs 2 billion; Budget 2017-18

Incentives for SMEs

  • Government to provide 500 million to bring IT reforms in the SMEs
  • Secure Transaction Act for SMEs and agriculture- the registry will help get loans with ease via e-registry

Read More:Government reduces Withholding tax on Automobiles; Budget 2017-18

Automobiles

  • Withholding Tax abolished on cars granted via PM’s Scheme
  • Withholding tax on car registration
    • 8500cc car: Rs. 7700 from Rs. 10,000
    • 1300cc car: Rs. 25,000 from Rs. 30,000
    • 1000cc car: reduced to Rs. 15000
  • Hybrid electric cars sales Tax reduced
  • Tax on Lubricant oil reduced to 2%
  • Regulatory duty on scrap: 5% from 10%
  • Special package to be announced for hybrid cars in Pakistan
  • Maintenance of tax relief on 1800cc-2500cc hybrid cars

Agriculture

  • Agricultural Loans: Rs. 1001 Billion
  • DAP Fixed Sales Tax: Rs. 100 from Rs. 400
  • Solar Tube Wells: Rs. 27 billion
  • Target of agricultural credit increased to Rs. 1.001 trillion from Rs. 700 billion
  • Sales Tax and Customs Duty on import of combined harvest machinery is abolished

Health

  • Clean Drinking Water for all: Rs. 12.5 billion
  • National Health Program: Rs. 10 billion
  • Sales Tax on Electric Cigarettes: 20%
  • Ministry of National Health Services: Rs. 48.7 billion
  • Hospitals will receive Rs. 10 billion

CPEC & Gawadar

  • CPEC Projects: Rs. 180 billion
  • 31 new projects in Gwadar including an airport, desalination plants & 200 bed hospital

Defence

  • Special allowance for soldiers of Zarb-e-Azab: 10% of income
  • Special financial scheme for families of martyred soldiers to be announced soon
  • Defense Budget: Rs. 920 billion

Read More:Highlights of the Punjab Budget 2017-18

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