CRS News Flash 23 June 2022 – PAKISTAN – 2022/2023 Budget Speech and Tax changes

Pakistan 2022/2023 Budget speech and tax changes
On Friday, 10 June 2022 , the Minister for Finance and Revenue presented the 2022/2023 Federal Budget Speech.

In addition, the Finance Bill 2022 was passed by the Punjab Assembly today, 23 June 2022.

Economic highlights:

·        GDP will be increased from Rs 67 trillion to Rs 78.3 trillion.

·        Inflation will be reduced from 11.7% to 11.5% during the next financial year.

·        Tax to GDP ratio is currently 8.6%. Government plans to raise this ratio to 9.2% of GDP during the next financial year.

·        Gross deficit that stands at 8.6% of GDP during the current fiscal year will be decreased gradually. In the next fiscal year, it will be decreased to 4.9%.

·        The current budgetary proposals aim to tax the sectors that have either remained out of the tax net or hovered in the periphery and not paid taxes as per the actual capacity.

·        The conflict between Russia and Ukraine poses a risk to Pakistan’s economy.

·        Monetary tightening and fiscal consolidation may slow down economic growth.

Tax measures announced:

·        To impose 2% additional tax on income taxpayers with thirty million rupees annual income.

·        To promote special economic zones to boost manufacturing.

·        Definition of resident individual amended to include Pakistani citizens not resident in any other country.

·        To raise the tax exemption limit for salaried income taxpayers.

To view the Finance Bill, 2022, follow the link.