Finance Minister Ishaq Dar Friday unboxed Federal Budget 2023-24, targeting a tentative 3.5% GDP growth, while keeping his fingers crossed that the International Monetary Fund (IMF) will throw the long overdue lifeline to Pakistan as it heads towards an imminent default.

Pakistan has shared the budget numbers with the IMF and the finance minister believes there’s no further objection the lender could raise — as they are in line with the programme requirements.

Dar — who is presenting the second budget of the Pakistan Democratic Movement-led government which came into power in April last year — returned to the podium for announcing the federal budget after a hiatus of five years.

At the outset of his budget speech — which began after a delay of almost two hours — the finance minister presented a comparative report of former prime minister Nawaz Sharif-led government (2013-2017) and the “incompetent” government led by Pakistan Tehreek-e-Insaf (2018-2022).

Highlighting the importance of the budget deficit, Dar said that it plays a major role in the economic issues of the country. “The PTI government miserably failed to bring reforms to the taxation system and increased the expenses substantially which is why the budget deficit during the almost four-year was almost double compared to the Pakistan Muslim League-Nawaz’s (PML-N) five-year tenure,” he lamented.

Under the leadership of Nawaz, Pakistan’s economy witnessed 6.3% GDP growth and was on the path to becoming a G20 member during the last tenure of PML-N, loadshedding was eliminated from the country and inflation was kept under control.

“The PML-N’s tenure was an era of development and economic stability,” he said calling out the PTI was devastating the economy of Pakistan.

But, he said, a “conspiracy” was hatched against then-prime minister Nawaz and the PTI was “installed” as the country’s ruling party.

Because of the PTI’s “dismal governance” during its nearly four-year tenure, the finance minister said, the country was now facing one of the “worst economic crises”.

Key takeaways (as per budget document available with TheNews.com.pk):

• No increase in duties on the import of essential items.
• Exemption of customs duties on raw materials of diapers, sanitary napkins.
• Reduction of customs of 10% to 5% on non-localised (CKD) heavy commercial vehicles (HCVs).
• 5% tax on payments made through credit or debit cards to restaurants resorts.
• Withdrawal of sales tax return filing requirement for availing concessionary fixed tax rate of 0.25% for IT & ITeS exports.
• Five years tax holiday for agro-based industries being SMEs set up on or after July 1, 2023, from tax year 2024 to tax year 2028.
• Exemption of customs duties on specific papers and art cards and board for printing of Holy Quran.
• Duty-free import of IT-related equipment equivalent to 1% value of their export proceeds.
• Withdrawal of capping of the fixed duties and taxes on the import of old and used vehicles of Asian Makes above 1,300cc.
• Grant of exemption of sales tax on contraceptives and accessories.
• The requirement of shop area for tier-1 retailers is proposed to be withdrawn.
• Re-imposition of 0.6% advance adjustable withholding tax on non-ATL persons on cash withdrawal.
• Enhancement of monetary limit of foreign remittance remitted from outside Pakistan from Rs5 million to rupee equivalent of $100,000.
• Waiver of 2% final withholding tax on purchase of immovable property for nonresident individual POC/NICOP holder where immovable property is acquired through foreign remittances remitted from abroad.
• Rationalisation of Super Tax under section 4C to apply on all persons across the board on income above Rs. 150 (m): insertion of additional three new income slabs of Rs350(m) to Rs400(m), Rs400(m) to Rs500(m) and Rs500(m) above to be taxed at 6%, 8% and 10% respectively.

FinMin Dar — who took charge of the finance ministry in September last year — mentioned that despite the tough economic challenges confronting Pakistan due to PTI’s misgovernance, the coalition parties still came into power.

“We took and are still taking tough decisions which rescued the economy from default,” he reiterated — a statement that the incumbent rulers have stressed time and again.

The finance minister mentioned that the country faced numerous internal and external challenges over the last year, but the government upped its efforts and tried to provide relief to the people.

Dar mentioned that although the nation suffered massive losses of $30 billion due to unprecedented floods, the government is bidding to resume the IMF programme and take the country on the road of development.

“We have completed all the prerequisites of the ninth IMF review […] we are hoping to reach an agreement with the IMF,” the minister told the members of the lower house.

This is a developing story and is being updated with more details…