Finance Minister Miftah Ismail presented the budget for fiscal year 2022-23 (FY23) in the National Assembly on Friday, with Prime Minister Shehbaz Sharif assuring public that the government was prepared to take tough decisions in an effort to rectify "years of economic mismanagement".
The coalition government, which has been very vocal in castigating the PTI for the current state of the economy, has made it clear that priviledged classes will have to lead the way out of the crisis. They have also assured the nation that the government will facilitate low-income citizens during these trying times.
But does the budget presented today match their lofty aims? Dawn.com takes a look at what may get costlier and what may get cheaper.
The government has proposed a levy on mobile phones in the new budget, with the rate per set between Rs100-16,000.
For mobile phones having a cost-and-freight (C&F) up to $30, it will be a mere Rs100. For phones more than $30 and less than $100, it will be Rs200.
In the same way, for phones costing between $101-200, it will be Rs600. For phones between $201-350, it will be Rs1,800.
For more expensive handsets, costing between $351-500, the rate of levy will be Rs4,000. Meanwhile, for phones between $501-700 it will be Rs8,000, while for phones more than $701 it would be Rs16,000.
If the stress from the current economic situation of the country was making you smoke incessantly in an effort to curb your anxiety, you might want to find another outlet for your nerves.
The federal excise duty (FED) on locally produced cigarettes with a retail price of more than Rs5,960 per 1,000 cigarettes has been raised by 7.14pc. The tax has been raised from Rs5,200 to Rs5,600 which equals an increase of Rs0.4 per cigarette.
Similarly, the FED on locally produced cigarettes with a retail price of less than 5,960 per 1,000 cigarettes has been increased by 10.81pc from Rs1,650 to 1,850. This amounts to a tax of Rs0.2 per cigarette.
Salaried individuals can perhaps breathe a sigh of relief as the budget has proposed enhancing the limit of taxation to Rs1.2m from Rs600,000 per year. This means that those earning up to Rs100,000 per month will not be liable to pay income tax.
The slabs for income tax have also been reduced from 12 to 7. Where the taxable income is between Rs600,000-Rs1.2m per year (Rs50,000 to Rs100,00 per month), the tax is Rs100.
However, for income between Rs1.2m-2.4m per year (Rs100,000 to Rs200,000 per month), it would be seven per cent of the amount exceeding Rs1.2m.
For income between Rs2.4m-3.6m per year (Rs200,000 to Rs300,000 per month), the tax applicable is Rs84,000 plus 12.5pc of the amount exceeding Rs2.4m.
Where income is between Rs3.6m-6m (Rs300,000 to Rs500,000 per month), it would be taxed at Rs234,000 plus 17.5pc of the amount exceeding Rs3.6m.
Further, where income is between Rs6m-12m per year (Rs500,000 to 10,00,000 per month), the tax would be Rs654,000 plus 22.5pc of the amount exceeding Rs6m.
For income more than 12m per year (more than 10,00,000 per month), it would be a little more than Rs2,004,000 plus 32.5pc of the amount exceeding Rs12m.
Meanwhile, business individuals and association of persons (AoPs) will also some relief as the limit of taxation has been increased from Rs400,000 to Rs600,000.
The budget document shows that the government has proposed a petroleum levy of Rs750bn, more than five times higher than the revised allocation of Rs135 billion for FY22, which means that it is going to reinstate the levy abolished by the former government.
Already, the new government has increased the prices of petroleum products by Rs60 over the span of a week after removing subsidies. Be prepared, as there is another price hike on the cards.
At this stage though, the volumetric breakdown of the price increase (meaning the increase in price per litre) has not been issued but you can expect an announcement on this soon.
All citizens who have more than one immovable property in Pakistan with a value of over Rs25m would be deemed to have received a rent amounting to 5pc of that immovable property's fair market value. They would have to pay 1pc in tax on this deemed rental income. However, one house of every person would be excluded from this tax.
The government has also proposed the imposition of a 15pc tax on capital gains on immovable properties if the holding period was a year or less. The tax would be reduced by 2.5pc every subsequent year, eventually going down to zero once the holding period reached six years.
The advance tax rate on the purchase and sale of property for filers is proposed to be enhanced to 2pc from the current 1pc, while it would be 5pc for non-filers.
Under the budgetary proposal, the government said any citizen of the country who is not a tax resident of any other country would be treated as a tax resident of Pakistan. It said the criterion for a resident person in connection to taxation was being modified as the current regime was being "misused by wealthy individuals".
The budget has also proposed an increase in the advance income tax of "luxury" vehicles with an engine of 1,600cc, which typically means sports utility vehicles and some sedans.
Further, it has also proposed an advance two per cent tax on the value of high-value hybrid and electric vehicles.
Other interesting points
Flying in style has also gotten a bit more expensive. The FED on club, business and first-class air travel has been increased from Rs10,000 to 50,000.
The FED on telecommunication services has also been raised from 16pc to 19.5pc.
On the bright side, if you have been worried about rising electricity prices and considered switching to solar, now is the time. All imports of solar panels and local supply will be exempted from tax.
In addition, imports by and local supply to charitable hospitals, all types of seeds and tractors have been exempted from tax. Withholding taxes on educational expenses and machinery on rent to be reduced.
The tax on Behbud certificates has been reduced from 10pc to five per cent.