EXPLAINER: What’s in the FY21-22 budget for you and me?
Budgetary and financial jargon that lands far beyond the comprehension of a layman in the fiscal budget that directly or indirectly affects them need sort of simplifying, if not oversimplifying, so people know what to expect and adjust accordingly and summer and winter comfortably.
Masses deserve to know what the legislature plans for them and what the people they brought in the parliament are doing in terms of policymaking to outdo the distress felt across the country with challenges such as inflation, housing crises, unemployment and whatnot.
PTI government claims, its third budget presented by its third finance minister, is people- and business-friendly fiscal document set to help the economy thrive that has been forecast to be 4.8 per cent this year defying all challenges post to global economies.
READ FULL BUDGET COVERAGE: FY2021-22: Rs8.5tr federal budget announced with historic PSDP allocation
The key priorities set by the federal government for FY 2021-22 include inclusive and sustainable economic growth; pro-poor initiatives and social safety net through the Ehsaas Programme’s vertical and horizontal expansion; reduction in inflation and price control and monitoring; increased development spending for more job creation and PM’s initiatives including Kamyab Jawan and Kissan Programmes.
Salient Features of Budget 2021-22
- No new taxes on salaried persons
- 10 percent increase in salaries and pensions of the government employees
- Rs260bn for Ehsaas Program
- Tax collection target set at Rs5829bn
- The remittances with the 25% increase, reached $29 bn in FY2020.
- GDP growth target has been set at 4.8%
- Development budget has been increased from Rs630bn to Rs900bn
4 to 6 million families will be given loans of upto Rs500,000
- Rs57 billion have been fixed for the first phase of the Dasu Hyder Project.
- Rs23 billion reserved for Diamir Bhasha Dam.
- Rs6 billion earmarked for Mohmand Dam and Rs 14 billion have been proposed for Neelam Jhelum Project.
- Rs100 billion for the development of underprivileged areas
- Rs30 billion earmarked for health, Rs 44 billion for higher education, Rs16 billion for sustainable growth
- Rs601 billion for the development of South Balochistan through 199 uplift projects
- US$1.1 billion would be spent on the purchase of COVID-19 vaccine. 100 million people to be vaccinated by June 2022.
- Rs20 billion have been reserved for PIA and Rs16bn for the Pakistan Steel Mills in the budget.
- Rs98 billion for Karachi Transformation Plan from PSDP and Rs 125 billion from Supreme Court fund.
- Rs9.3 billion for ML-1 project and Rs12 billion allocated for Hyderabad-Sukkur transmission line.
- Provincial share in the federally collected taxes to stand at Rs3,411 billion. Provinces’ share in NFC increased, to receive an extra Rs707bn.
- Rs14 bn allocated for the Billion Tree Tsunami project.
- HEC to get Rs66 billion besides an allocation of Rs44 billion for uplift projects
- Rs 5 billion allocated for fresh local bodies election
- Rs5 billion earmarked for holding fresh census in the country
- The withholding taxes on mobile services lowered from 12.5 percent to 10 percent
- ‘Meri Gari scheme’ launched. Custom, regulatory duty abolished from 800CC vehicles. Vehicles having old models and manufacturing dates exempted from advance custom duty.
- Telecom sector gets status of industry. 10-year tax exemption for special technology zone authority
- Custom duty from vaccine and medicines of livestock abolished
- Tariff exemptions on some ingredients of poultry feed
- Sugar included in the third schedule of sales tax act, helping in the elimination of artificial hike in prices of the commodity
- Federal Excise Duty on telecommunication reduced from 17 percent to 16 percent besides imposing FED on telephone calls and using internet for over three minutes. The FED is also imposed on mobile messaging.
- Tax exemption on paper used for Quran publication, auto-disable syringe and oxygen cylinders
- Exemption announced on payments through bank cards for purchases besides elimination of FED on electric vehicles, completely knocked down (CKD) parts and kits.
- Regulatory duty on the import of luxury items hiked.
- Sales tax rate on cars under 850 cc dropped to 12.5 pc
- Turnover tax for traders dropped to 1.25 pc
- The Information Technology sector and related services declared zero-rated categories
- Additional federal excise duty from cooking and vegetable oils scrapped
- Medical supplies including Auto disable syringes and oxygen cylinders see tax cuts
- Duties on electronic vehicles for this fiscal year have been abolished