Pakistan Federal Budget 2018-19 Live Updates

• Pakistan Federal Budget 2018-19 Live Updates 
• Under the amnesty scheme, foreign assets will be charged a tax rate of 3%, while liquid assets – like foreign currency – will be taxed at 5%.
• By 2023, the rate of corporate tax will be 25% through a percentage-point decrease each year.
• Currently, the rate is 30%. In 2013, the rate was 35%.
• The rate of super tax will decrease by a percentage point each fiscal year, says Ismail.
• This way, the super tax on banks will end in four years, while non-banking companies will see its rate become zero in three years.
• Non-filers of income tax returns will not be allowed to purchase property worth more than Rs4 million, says Ismail.
• However, he adds that filers will pay only 1% tax on purchase of property.
• The move is a huge negative for the real estate sector where a majority of transactions are ‘off-the-books’, greatly understated, and consist mostly of non-filers of income tax returns.
• Ismail says the income tax exemption threshold would be increased to Rs1.2 million.
• This means a salaried individual who earns Rs100,000 a month (Rs1.2 million a year) will be exempted from paying any income tax.
• Additionally, companies would only be audited once every three years.
• The proposal comes as the FBR struggles to conduct audits, and is faced with a huge backlog.
• Brokerage income tax will be an adjustable 0.2%, a change from the previous regime of a fixed rate.
• The demand will be a pleasant surprise for brokerage houses that had demanded an adjustable rate of income tax.
• Salaries as well as pensions of military and civil servants will be increased by 10%.
• Duty on the import of electric cars has been reduced to 25% from 50%. Regulatory duty has been removed, says Ismail.
• The Benazir Income Support Programme will be allocated Rs125 billion, says Ismail.
• Tax on bonus shares has been removed, says Ismail.
• The move would be a huge boost for stock market investors. The Pakistan Stock Exchange (PSX), as part of its budget proposals, had urged the government to remove the tax.
• The defence budget will stand at Rs1,100 billion, says Ismail. Another Rs100 billion has been allocated as the Armed Forces Development Programme.
• Witnessing the recent boom in Pakistan’s film industry, Ismail says the budget will propose a 50% reduction in income tax rates for the next five years.
• An amount of Rs25 billion has been allocated for Karachi, Sindh’s provincial capital, says Ismail.
• “A desalination plant would also be set up in the industrial hub. It will provide the city 50 million gallons of water per day.”
• The federal government will provide buses for school-going girls in a bid to promote education in the country’s remote areas, says the finance minister
• Budget deficit’s target has been set at 4.9% for next year. The current fiscal gap is 5.5% of GDP, says Ismail.
• With huge exemptions on offer and low tax revenues, the target seems to be ambitious, say experts.
• The government is targeting a tax-to-GDP ratio of 13.8%, says Ismail.
• The Federal Board of Revenue (FBR) will target a revenue of Rs4,435 billion in the next fiscal year.
• Pakistan will target 6.2% GDP growth in 2018-19, says Ismail.
• The country’s economy grew at 5.8% in 2017-18, according to Pakistan Economic Survey 2017-18.
• Remittances, for long Pakistan’s saving grace, are expected to hit the $20-billion mark, according to the finance minister.
• Foreign exchange reserves of the State Bank of Pakistan (SBP) will be at a higher level than they are right now, says Ismail.
• The current level is below $11 billion, which was at one point over $17 billion.
• The finance minister says agriculture disbursement stood at Rs336 billion in 2012-13, which would increase to Rs800 billion in June this year.
• Taking credit for low inflation figures, Ismail says food inflation in 2017-18 has been 2%.
• However, the low inflation figure has come mainly on the back of low oil prices in the global market.
• Ismail says the inflation target for 2018-19 has been set at below 6%.
• Ismail says the country was on the verge of bankruptcy when the current government took over in 2013.
• “Pakistan has now achieved a 13-year high in GDP growth and is currently the world’s 24th largest economy,” says the newly-appointed finance minister.