Highlights of the budget 2020-2021

Islamabad: Federal Industries and Production Minister Hammad Azhar presented the budget in a session chaired by Speaker Asad Qaiser. Prime Minister Imran Khan attended the session too.

Budget Amount: Rs 7,294.9 billion.

Fiscal Deficit  2020-21: Rs 3,500 billion.

Relief Actions by Govt

DTC sop: Govt plans higher basic income tax exemption limit, hike in  medical & conveyance allowances - The Economic Times
  • No New Taxes
  • No Tax on coronavirus and cancer diagnosis kits
  • No Import Taxes on kids food supplement & Diet food
  • Tax Exemption is given to overseas Pakistanis on investment in saving bills
  • No advance tax on auto rickshaws, motorcycle rickshaws (and up to 200cc motorcycles).
  • Sales Tax for big retailers reduced from 14% to 12%.

Budget Allocations

Authorities suggest reversing of income tax rates

  •  EHSAAS program: Rs 208 billion allocated to alleviate poverty.
  •  HEC Funds: Rs 34 billion allocated.
  •  Energy, Food and Misc. Sectors: Rs 180 billion allocated.
  •  NAYA Pakistan Housing Scheme: Rs 30 billion allocated. 10 million houses envisioned for the poor community.
  •  Pakistan Railways: Rs 40 billion allocated.
  •  Federal Govt-run hospitals (Karachi+Lahore): Rs 13 billion allocated.
  •  Health Sector; Science and Information Sector: Rs 20 billion allocated for both sectors exclusively.
  •  Welfare Fund for Artists: Rs 1 billion allocated.
  •  Coronavirus Combat: Rs 70 billion allocated.
  • Climate Change Combat: Rs 6 billion allocated.
  • Special Economic Zones: Rs 80 billion allocated.
  •  Water Projects: Rs 70 billion allocated.
  •  Defence Budget: Rs 1.289 trillion allocated (12% higher than last year’s).

Other Prominent Points

  • Threshold Variation

Now, people will have to show their CNICs while making a purchase of over Rs100,000. Earlier, this was applicable to Rs50,000 purchases.

  • Reduction in federal excise duty on Cement:

The government has reduced the federal excise duty on cement from Rs2 to Rs1.75 per kilogram.

  • Spending on Developmental Projects

The government will also be spending on development projects in special areas. Forty billion rupees will be spent in Gilgit-Baltistan and Kashmir, while Rs48 billion on merged districts.

  • Increase in federal excise duty on e-cigarettes

The federal excise duty will be increased on e-cigarettes. The FED on imported cigarettes, ‘bidi’, and cigars have been increased to 100%, it was 65% before. The tax on cigarette’s filter rod has been increased from Rs0.75 to Rs1.

  • Increase in federal excise duty on caffeine-related products

The FED on caffeine-related products is being increased from 13% to 25% to discourage their use. Excise duty has also been imposed on double cabin pick-ups.

  • Reduction in FED on cement 

The FED on cement has been reduced by 25 paisas to Rs1.75.

  • Revenue Target for FBR
FBR to make tax concessions time-bound

The FBR has set his revenue target at Rs3,900 billion this year. It is recommended that regulatory duties are decreased to stop the smuggling of products.

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