Federal Budget 2018-19

The federal government has finally unveiled the Budget 2018-19. Finance Minister Miftah Ismail, who took the oath of federal minister hours before announcing the budget today, presented the sixth and final budget of the Pakistan Muslim League-Nawaz (PML-N) government in the National Assembly.

The opposition parties have called the announcement of the government’s sixth budget “illegal and unconstitutional” and walked out from the National Assembly in protest. The government remained unmoved and went on with the announcement of the budget 2018-19.

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

PML-N has introduced the new budget of Rs. 5.932 trillion where 1.03 trillion has been reserved for the Public Sector Development Program and Rs 1.013 trillion for provincial annual development plans. The government has set a target of 6.2% Gross Domestic Product (GDP) growth.

Information Communication Technology

  • Exemption of import duty on the import of laptop and notebook’s parts
  • Reduction in the regulatory duty of Optical Fiber from 20% to 10%
  • Regulatory duty on other Optical Fiber products will be reduced by 5%

Automobiles

  • Abolishment of 16% tax on charging stations of electric cars
  • Import duty on electric cars to be reduced from 50% to 25%
  • Regulatory duty on electric cars has been abolished

Education

  • Higher Education Sector: Rs. 46, 679 million
  • Rs. 4336 million allocated for Ministry of Education and Professional Training

Taxes & Duties

  • The target for Tax Collection By FBR: Rs. 4.435 trillion
  • Withholding tax on non-filer companies to be increased to 8% from 7%
  • Exemption of tax on annual income up to Rs 1.2 million.
  • Exemption of tax on income falling between Rs 1.2 to Rs 2.4 million annually
  • 5% tax on income falling between Rs 1.2 to Rs 2.4 million annually
  • 10% tax on income falling between Rs 2.4 to Rs 4.8 million annually
  • Maximum 15% tax on income above Rs 4.8 million annually
  • Non-filer won’t be able to buy property worth more than Rs. 4 million
  • The audit of companies will be carried out only once in three years including
    sales tax, income tax, excise tax audit
  • The Corporate Tax rate will be 25% by 2020 with percentage point decrease every year
  • Super tax to be decreased by a percentage point each fiscal year
  • Exemption of sales Tax on paper used in the printing of Quran
  • Removal of tax on bonus shares

Entertainment

  • Import Duty on Film and Drama Equipment will be 3% while the Sales Tax will be 5% Sales tax
  • 50% reduction in income tax rates for the next five years

Health

  • No Tax on hearing aid
  • No customs duty on cancer medicines
  • Reduction in customs duty on eyesight glasses

Youth Development Projects

  • 10 Billion allocated for Prime Minister Youth Scheme
  • 400 new vocational institutes to be created

Agriculture

  • Rs. 5 billion allocated for Agriculture Technology
  • Rs. 5 Billion allocated for Agriculture Fund
  • Sales Tax on agricultural material reduced from 7% to 5%
  • Sales tax on fertilizers to be 3%
  • Rs. 800 billion allocated for agricultural loans

Defense

  • Defense Budget: Rs. 1.1 trillion
  • Rs. 100 billion has been allocated for Armed Forces Development Program

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