Pakistan Budget 2021-2022: Live updates

All eyes are one the Parliament as Finance Minister Shaukat Tarin presents the budget 2021-22. Tarin announced that the total outlay of the budget had been kept at Rs8,478 billion and had set the tax collection target at Rs5,829 billion.

Here are the latest updates from fiscal 2021-22 budget (UAE local time):

4.38 pm

The finance Minister just finished the budget speech. Speaker National Assembly Asad Qaiser adjourned the budget session after the budget speech and will commence debate on Monday.

4.37 pm

Rs1,330 billion allocation for defence while Rs3,105 billion is earmarked for interest payments in 2021-22.

4.36 pm

Minimum salary increased from Rs15,000 to Rs20,000.

4.35pm

Sales tax on electronic vehicles has been reduced from 17% to 1%. Reduction in tax liability by 25% for women entrepreneurs

4.34pm

In order to get rid of load shedding and provide uninterrupted power supply to the people, Rs118 billion has been earmarked in the budget for power infrastructure/transmission and reduction in theft and improvement of losses.

4.33pm

221 million Pakistanis to be vaccinated until June 2022

4.32pm

To mitigate the impact of Covid-19, the government has introduced a special programme with an outlay of Rs70 billion.

4.30pm

The government will slash withholding taxes on mobile phones. The taxes will be reduced to 10 per cent at first and then to 8 per cent.

4.27pm

Reduction of block taxation on capital gain on disposal of immovable properties if gain exceeds Rs20 million

4.25pm

Sales tax on locally manufactured cars reduced from 17 per cent to 12.5 per cent. Federal Excise Duty on 850cc cars abolished.

4.26pm

Decrease in GST from 17% to 12.5%. CGT on stocks down by 2.5% to 12.5%. Turnover tax reduced to 1.25% from 1.5%. Reduction in threshold of monthly electricity bill for withholding tax on electricity consumption from 75,000 to 25,000 from domestic users not appearing on Active Taxpayers’ list.

4.22pm

Mortgage financing is introduced for the first time ever. Shaukat Tarin said the passing of the foreclosure law has enabled banks to start lending to people. The government will provide interest-free loans of up to Rs500,000 to the poor

4.20pm

NFC award allocated Rs2874 billion. Excise duty for telecom sector decreased from 17% to 16%. Fed Excise duty to be imposed on calls longer than 3 mins.

4.17pm

Rs12 billion allocated for Hyderabad-Sukkur transmission line. Turnover tax ceiling for small business raised from Rs3 billion to Rs10 billion. Rs14 billion allocated for Billion Tree Tsunami

4.11pm

Public sector development programme allocation increased by 40 per cent to Rs900 billion in 2021-22. The amount will be spent on water distribution, road infrastructure, special economic zones, combatting climate change, among others.

4.09pm

Rs20 billion allocated for PIA and Rs16 billion for Pakistan Steel. Sales tax on 855cc cars to be brought down from 17% to 12.5%. Rs1 billion allocated to increase the production of olives. Rs54 billion allocated for the development of KPK. Karachi restoration plan would include Rs125 billion for Supreme Court.

4.04pm

Rs260 billion allocated for the Ehsas Cash programme. About Rs12 billion set aside to promote small and medium enterprises while another Rs10 billion reserved for the Kamyab Jawan programme

4.01pm

Rs19.5 billion allocated for the development of 14 districts in the Sindh province

3.59pm

5% growth target set for the agriculture sector in 2021-22. All crops, including wheat, rice, sugarcane, and corn, recorded exceptional growth in 2020-21 despite locust attacks

3.57pm

Rs91 billion earmarked for water security. Rs23 billion reserved for Diamer-Bhasha Dam. Rs6 billion allocated for Mohmand Dam. Rs118 billion reserved for upgrading transmission lines. Rs100 billion allocated for underdeveoped areas. Rs98 billion reserved for Karachi Transformation Plan under PSDP. Rs40 billion reserved for G0B Development Plan.

3.53pm

Banks received applications for Rs100 billion loans under housing programme. Rs260 billion allocated for small businesses, and the destitute Rs900 billion allocated for PSDP. Rs12 billion reserved for agricultural development. Government has also announced a 'National Agricultural Emergency Programme'

3.51pm

The nation's per capita income increased by 15 per cent despute the Covid-19 pandemic. The government has given aid to 15 million people suffering from the pandemic in the first phase

3.48pm

Rs100 billion allocated for under developed areas. Loans will be granted to 5-6million families for their businesses. Rs200,000 loan to be provided to farmers for agricultural machinery. Government envisions 6-7% growth rate in next 2 years. Special economic zones to be set up to relocate industries.

3.43pm

The Government has set a Rs26.8 billion target for exports. Rs91 billion has been set aside for water conservation. Revenue collection target has been set at Rs5.8 trillion for FY22. 10 per cent increase in pension. Minimum wage increased to Rs20,000.

3.37pm

PTI Government's austerity measures and economic reforms brought economy on the path of recovery: FM Tareen

3.35pm

A development budget of Rs30 billion has been set for the Railway Division. Rs8.11 billion for science and technology and Rs56.2 billion for the Cabinet Division in the next financial year.

3.33pm

'The biggest challenge was avoiding default', says Shaukat Tarin

3:31pm

Tax revenue collections surged 18 per cent in 2020-21 and crossed the Rs4 trillion barrier for the first time

3:29pm

The government has planned big incentives to the low-cost housing sector and will provide Rs0.5 million interest free loans to construct homes

3:28pm

Customs duty reduced from 11% to 3%; GST rates are also being reduced

3:25pm

Country's $16 billion foreign exchange reserves are good enough for more than three months of imports

3:20pm

Per capita income has been raised up to 15 per cent

3:10pm

Pakistan's current account deficit stood at $20 billion in 2018 has now stand at $800 million surplus

2:58pm

The government may earmark funds for Covid-19 to procure more vaccines in the upcoming year. According to a government statement, it has spent $250m for procuring vaccines in FY21 and the upcoming budget will see an enhanced amount for this purpose.

2:57pm

The construction sector is expected to grow at 8.3 per cent in fiscal year 2021-22.

2:55pm

6.5 per cent and 6.2 per cent growth targets set for the industrial and manufacturing sectors, respectively, in fiscal year 2021-22.

2:51pm

According to the budget 2021-22 document, the GDP growth rate has been set at 5 per cent while 2.2 per cent target is set for important crops.

2:37pm

Speaker National Assembly Asad Qaiser is expected to chair budget session and will invite Finance Minister Shaukat Tarin to present Finance Bill for financial year 2021-22.

2:35pm

Members National Assembly and Ministers arriving at the Parliament House, starting at 3pm UAE time.

2:15pm

Prime Minister Imran Khan turned down proposal to impose tax on Internet usage and said Internet should be considered a basic requirement.

2:10pm

In a tweet, Minister for Information and Broadcasting Chaudhry Fawad Hussain said all economic indicators were positive and such political and economic stability was only possible due to confidence of people and institutions in the leadership of Prime Minister Imran Khan.

2:05pm

The Minister of State for Information and Broadcasting Farrukh Habib said that the budget would be austerity-oriented and public-friendly and efforts would be made to put minimum burden on the common man. More taxes are likely to be imposed on smartphones.

2:02pm

Federal Finance Minister Shaukat Tarin will present budget for financial year 2021-22 in the National Assembly today in an hour time.

2pm

The cabinet has approved 10 per cent hike in salaries for federal government employees and pensioners for the fiscal year 2021-22, starting July 1.

1:56pm

Prime Minister Imran Khan said budget 2021-22 will have 'pleasant surprise elements' and ease inflationary pressure on common man

1:55pm

Prime Minister Imran Khan arrived at the Parliament House to attend budget session

1:50pm

1:50pm

Finance Minister Shaukat Tarin is expected to announce incentives to the IT sector and export-oriented industries as he said Pakistan will focus more towards value-added exports

Pakistan sets 4.8% GDP target for 2021-2022 fiscal

The government is targeting a GDP growth of 4.8 per cent for fiscal year 2021-22, compared to 3.94 per cent achieved in 2020-21; and if achieved, this will be the highest GDP growth since 2018-19.

The cabinet has approved 10 per cent hike in salaries for federal government employees for fiscal year 2021-22, starting from July 1.

Finance Minister Shaukat Tarin is expected to announce incentives to the IT sector and export-oriented industries as he said Pakistan will focus more towards value-added exports

Information Minister Fawad Chaudhry said that all of Pakistan's economic indicators were positive, adding that the country was moving towards economic stability after a long time.

"The country's people and institutions have full faith in Prime Minister Imran Khan which has made economic and political stability possible," he said.

The minister also urged thbe opposition to treat accountability and reforms separately, and take part in talks on electoral and judicial reforms.

Key fiscal targets

The overall outlay of the budget is expected at Rs8 trillion with an expected fiscal deficit of 5.5 per cent to 6pc of GDP for FY22 compared to an estimated deficit of 6pc of GDP during FY21.

The revenue collection target for FBR has been set at Rs5.8tr for FY22, which will be lower than IMF’s target of Rs6tr. Still, the target seems to be ambitious, as it is likely to be 23pc higher compared to the estimated collection of Rs4.7tr in FY20-21.

Additional revenue measures worth Rs350 billion are also expected.

The non-tax collection target will be set at Rs1.42 trillion.

For FY22, the government is expected to earmark Rs900 billion for federal PSDP, an increase of 38pc from the previous budget. A key element is total development outlay, which includes provincial spending. It is expected that the government will set a provincial spending target of Rs1 trillion, taking the total development outlay to Rs1.9t compared to last year’s budgeted outlay of Rs1.3 trillion (up 44pc).

Government is likely to set mark-up interest and defence expenditure targets at Rs3.1 trillion and Rs1.4 trillion, up 4 per cent and 9 per cent from last year’s budget, respectively.

The government also intends to increase salaries and pensions by 15-20pc.

The fiscal deficit is expected to be around Rs2.9 trillion in FY22 which could be 5.6pc of the GDP.

For subsidies, the government is expected to set a target of Rs530 billion for FY22.

The current account deficit for FY22 is projected to be around $2.3 billion which would be less than 1 per cent of the GDP.

The cotton bales output expected for FY22 would be around 10.5m bales.

The government may also earmark funds for Covid-19 to procure more vaccines in the upcoming year. According to a government statement, it has spent $250m for procuring vaccines in FY21 and the upcoming budget will see an enhanced amount for this purpose.

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