Budget FY24 key takeaways: No new taxes in Rs14.5tr budget, 17.5pc increase in pensions

Minister for Finance and Revenue Ishaq Dar tabled an Rs14.5 trillion budget at the National Assembly on Friday.

The budget would target total tax revenue of Rs9.2 trillion, Dar said adding that there would be no new tax on the industrial sector.

The government has targeted total non-tax revenue of Rs3 trillion for 2023/24.

Budget FY24 key takeaways:

• Targets inflation at 21%
• Targets exports of $30 billion
• ad hoc relief allowance of 35% for grade 1-16 officers and 30% for grade 17-22
• 17.5pc increase in pensions
• Minimum wage proposed at Rs32,000; wages of government employees from Grades 1-16 and Grades 17-22 to be increased by 35pc and 30pc, respectively
• Estimates debt servicing funds of Rs7.3 trillion
• Rs1.8 tr allocated for defense in budget
• Rs5 billion for the development of sports at schools, colleges, and professional sports
• No increase in duties on the import of essential items
• Customs duties exempted on specific papers and art cards and board used for printing of Holy Quran.
• Customs duties on raw materials of diapers, and sanitary napkins are exempted
• Grant of exemption of sales tax on contraceptives and accessories
• Solar panels and their raw materials are exempted from the customs duty
• No new taxes for the upcoming year
• Exemption of customs duties on the import of seeds for sowing to promote growth in the agricultural sector
• Withdrawal of capping of the fixed duties and taxes on the import of old and used vehicles of Asian Makes above 1300CC
• Services provided by restaurants including cafes, food (including ice cream), parlours, coffee houses, coffee shops, deras, food huts, eateries, resorts, and similar cooked, prepared, or ready-to-eat food service outlets, etc are proposed to be taxed at 5pc if payment is made through debit or credit cards, mobile wallets or QR scanning
• Increase in withholding tax rate from 1pc to 5pc on payment to non-residents through debit/credit or prepaid cards
• Exemption of customs duties on import of shrimps/prawns/juveniles for breeding in commercial fish farms and hatcheries
• Rs1 billion allocated for health insurance of working journalists
• Income tax for freelancers will be 0.25% till 2026
• The tax collection target for the Federal Board of Revenue (FBR) is set at Rs9,200bn, which is 23pc higher than last year’s target.
• Rationalization of Super Tax under section 4C to apply to all persons across the board earning income above Rs150 million: insertion of additional three new income slabs of Rs350 million to Rs400 million, Rs400 million to Rs500 million, and Rs500 million above to be taxed at 6%, 8%, and 10% respectively
• Five-year tax holiday announced for agro-based industries being SMEs set up on or after July 1, 2023, from tax year 2024 to tax year 2028
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