INTRODUCTION
Read complete detailed information on “Comments on Budget 2023-2024 of Pakistan”. We have presented brief comments on amendments suggested and proposed in the new budget 2023-2024 in the Income Tax Ordinance 2001, Sale Tax Act 1990, and Federal Exercise Act 2005. In addition, the comments on the amendments are based on relevant current practices and understanding of laws and are not detailed or exhaustive for the general public.
We have included new budget proposals addressing general guidelines as reliefs and challenges that must be knowledge by the taxpayers before the period begins. A detailed interpretation and comments will be provided later on after the bill is passed by the parliament and documents of ITO, STA, and FEA as described above are published on authority websites.
Kind Regards,
BRIEF VIEW OF BUDGET 2023-2024 of Pakistan
| Relevant Heads | Govt. Budget 2023-24(R) | Govt. Budget 2022-23 (R) | Difference (R) | % Change |
| RECEIPTS: | ||||
| FBR Tax Revenue | 9,200 | 7,200 | 2,000 | 27.8 |
| Nontax Revenue | 2,963 | 1,618 | 1345 | 83.1 |
| Gross Revenue Receipts | 12,163 | 8,818 | 3,345 | 37.9 |
| Less: Transfer to Provinces | 5,276 | 4,129 | 1,147 | 27.8 |
| Net Revenue Receipts – Federal Share | 6,887 | 4,689 | 2,198 | 46.9 |
| EXPENDITURE: | ||||
| Total Expenditure | 14,461 | 11,090 | 3,371 | 30.4 |
| Current Expenditure | 13,320 | 10,528 | 2,792 | 26.52 |
| Domestic Debt | 6,431 | 4,795 | 1,636 | 34.12 |
| Foreign Debt | 872 | 725 | 147 | 20.21 |
| Pension | 761 | 609 | 152 | 24.96 |
| Defense Affairs & Services | 1,804 | 1,587 | 217 | 13.67 |
| Grants & transfers (Province + Others) | 1,464 | 1,155/td> | 309 | – |
| Subsidies | 1,074 | 1,103 | -29 | (2.63) |
| Running civil Government | 714 | 553 | 161 | 29.11 |
| Provision for contingencies | 200 | – | 200 | – |
| Development Expenditure | 1,140 | 562 | 588 | 102.85 |
| Federal Budget Deficit | (7,574) | (6,401) | (57) | 18.33 |
| Primary Deficit | (270) | (270) | (57) | (69.33) |
| Projected Nominal GDP | 105,817 | 84,658 | 21,159 | 24.99 |
| Fiscal Deficit (FED) as % of GDP | (7.2) | (7.6) | ||
| Primary Deficit as % of GDP | (0.3) | (1.0) | ||
Changes in Income tax Ordinance 2001
- Advance Tax of 0.6% on Cash withdrawal on Non-Filer.
- Tax Exemption to Income from Reko Diq Project.
- Relief of Filling Service Sale Tax Returns to persons exporting Software Services.
- The exemption provided to overseas Pakistan of 2% as advance Tax 236K on the Purchase or Transfer of immovable property.
- 10% Fixed Tax imposed on the issue of Bonus Shares.
- Super Tax rates increased on income higher than 350 Million.
- Reduction of Minimum tax or turnover tax to 1% for Listed Companies.
- Advance Tax collected at the import stage under section 148 increased from 5.5% to 6% for commercial importers.
- Advance Tax under section 153 deduction of goods and services increased by 1% on payment to residents and non-residents.
- Tax deduction on foreign payments made via debit or credit card increased from 1% to 5%.
- Exemption for PATA/FATA extended till 30th June 2024.
- Reduction in tax lower of 10% or 5 Million for builders for three years.
- Tax credit on the construction of the new house of lower than 10% or 1 Million.
- SMEs including IT and IT-enabled services with a threshold increased from 250 Million to 800 Million.
- The threshold for Foreign remittance increased from Pak Rupees 5 Million to USD 100,000.
Changes in Sale tax Act 1990 and Federal Exercise Act 2005.
- Power transmission is considered and classified as services rather than as goods.
- Branded red chilies, turmeric, and ginger are not included in the exemption.
- Certain edibles in retailed packing with no brand name are exempted.
- The sale tax rate on supplies from FBR integrated retail outlets increased from 12% to 15%.
- Federal Exercise duty to be charged on inefficient Fans Rs 2000 and Bulbs 20%.
- Removal of regulatory duty on IT-related equipment to encourage information technology sectors.
- Sale tax on IT and IT-enabled Services are subject to a reduction from 15% to 5%.
CONCLUSION
We have observed that the proposed Budget 2023-2024 of Pakistan covers significant implications, challenges, and relief especially for sectors highly contributing to the economy of the country.
To the best of our knowledge, the information we provided is relevant, accurate, and up-to-date. If there are any specific details or information you think that is incorrect or missed please let us know.
If you want any professional tax services like Income tax services, sale tax services, NTN registration services, Financial Services, Intellectual property rights, and other consultancy services then contact us.
