Live update Mini-budget: Finance (Supplementary) Bill 2023 presented in National Assembly

Minister for Finance and Revenue Senator Ishaq Dar on Wednesday moved the Finance (Supplementary) Bill 2023 or the “mini-budget” in the National Assembly as the government eagerly wants to meet the prerequisites for unlocking the $1.1 billion International Monetary Fund (IMF) loan.

Addressing the lower house of parliament, Dar proposed the imposition of new taxes worth Rs 170 billion in various sectors to minimize the fiscal deficit of the current fiscal year 2022-23.

The finance minister said the government has proposed to increase the General Sales Tax on the import of luxury items from the existing 17% to 25%, while overall General Sales Tax has also been increased from the existing 17% o 18%.

The minister said the government recently held talks with the International Monetary Fund (IMF) to revive the programme with the IMF in which it was agreed that the government would take some tough decisions to streamline the deteriorating condition of Pakistan’s economy.

He said the new revenue measures would not affect the poor segment as most of the new taxes were being imposed on luxury items not used by them.

Dar compared the performance of the previous PML-N and PTI governments. He said that during former prime minister Nawaz Sharif’s tenure, the GDP per capita increased while the Pakistan Stock Exchange’s (PSX) market capitalisation was $100 billion.

However, the PSX’s market capitalisation declined to $26bn during the PTI government, he said, adding that the decrease showed a lack of investor confidence in the previous government.

Earlier on Tuesday night, the Federal Cabinet approved the Finance Bill (mini-budget) for the implementation of taxes of Rs170 billion committed by the government of Pakistan with the International Monetary Fund (IMF). The cabinet was presided over by Prime Minister Shehbaz Sharif on Tuesday.

Dar also criticised the PTI government for increasing the country’s debts significantly.

“In 2017-18, GDP growth had surpassed six per cent, inflation was at 5pc, food inflation at 2pc … After the 2018 elections, a selected government came into power. Because of its failures, Pakistan’s economy shrunk.”

The minister then moved on to the relevant amendments that he was proposing:

• Increase in federal excise duty on cigarettes and fizzy drinks.
• Increase in federal excise duty on cement from Rs1.5/ kg to Rs2/ kg
• GST increase from 17pc to 18pc
• Benazir Income Support Programme (BISP) handouts increased to Rs400bn from Rs360bn

Dar also informed the National Assembly that the government had suggested Rs 40 billion increase in the budget of the Benazir Income Support Programme (BISP) to protect downtrodden segments of the society from the impact of increasing inflation.

“The government has proposed to increase the BISP budget from Rs 360 billion to Rs 400, allocating Rs 40 billion addition funds to benefit the (BISP) beneficiaries,” he added.