Federal Budget 2015-2016 of Pakistan by Ishaq Dar

ISLAMABAD(Saturday, June 06, 2015): Get the full highlights of the Federal Budget 2015-16 unveiled by Finance Minister Ishaq Dar in the National Assembly on Friday 5th June, 2015 with PM Nawaz Sharif all other ministries..

Federal Budget 2015-2016 Salient Features

Per Capita Income increased by 9.3% to $1512 from $1384
Inflation down at 4.6%; lowest in 11 years
Fiscal Deficit for 2015-16 to be limited to 4.3% “InshAllah”
Policy Rate of State Bank of Pakistan cut to 7%
Exports declined by 3.2% to $ 20.18 billion from $ 20.83bn (2014-15)
Imports declined by 1.61% from $34.65bn to $34.09bn
Forex reserves touch $12bn, up from $7.7bn in Feb 2014
KSE Index goes up by 70% to 34,000 from 19,916 in May 2003
4100 new companies registered, up by 11.9% from 3664 in 2013
Work on 7000 MW new power projects underway, 3600 MW from LNG and by 2017 would increase to 10,600MW
Investment to GDP Ratio goes up in current year to 13.5%, target for 2015-16 is 16.5%
Public Debt Management limited to 62.9% this years and in next 3 years will be brought to 60%
BISP scope to be increased to support 5 million families, budget to be enhanced to Rs102bn from Rs97bn
Budget for Pakistan Baitul Maal to be doubled to Rs4bn
500 universal e-telecentres to be set up at the cost of Rs12bn to encourage e-agriculture, e-commerce, e-learning
Remaining areas of country to be linked with fibre optic cable at the cost of Rs2.8bn in consultation with provincial governments
Rural areas to be linked with communication network at the cost of Rs3.6bn
International call rates to be rationalized, grey traffic to be cut by increasing legal traffic from Rs367mn to Rs1.1bn per month
Information and Communication Technology Scholarships to continue next year
Rs 248 bln allocated for Power Sector as compared to Rs 200 bln last year that includes: Rs52bn for Dasu Hydropower Project, Rs21bn for acquisition of land for Diamer-Bhasha Dam, Rs11bn for Neelum Jhelum, Rs11 for Tarbela IV and Rs5bn for Guddu
Rs185bn allocated for roads, bridges; an increase of 65% from Rs112bn
For Karachi-Lahore motorway Rs120bn allocated for Lahore-Abdul Hakeem Section, Rs61bn for Multan-Sukkur and Rs10.5bn for Sukkur- Hyderabad
Rs16bn earmarked for Bus Transit System in Karachi to carry 0.3mn people daily
Rs78bn allocated for Railways; Rs41bn for 52 schemes and Rs37bn for salaries
Rail Track dualisation from Khanewal-Raiwind, Shahdara- Lalamusa to be completed in 2015-16
159 dilapidated rail bridges to be upgraded by June 2017
170 new railway engines to be purchased, 100 reconditioned
1500 new passenger bogies to be added
Central Contral Centre for Railways to be set up
Rs71.5bn allocated for HEC, including Rs20.5bn for 143 projects and Rs51bn for ongoing expenses, an increase of 14%
Revenue Measures for Budget 2015-16:
Rate of Capital Gains Tax for securities increased from 12.5% to 15% and from 10% to 12.5%
For non-filer, increase in tax rate for contractors by 3%, for suppliers 2%, for commission agent 3% and 2.5% on profit on deposit
Advance income tax on transactions @ of 0.6% for non-filers on all banking instruments and fund transfers
Uniform tax of 35% on all sources of income for banks – 2.5% increase on tax ratio on dividends for non-filers
Threshold for tax on domestic electricity bills decreased from Rs 0.1 million to Rs 75,000
10% withholding tax on resident taxpayers on renting out/use of commercial, industrial and scientific equipment
One-time tax on affluent individuals/companies having income above Rs. 500 million @ 4% of income for banking companies and 3% for others for rehabilitation of IDPs of FATA/Khyber Pakhtunkhwa

Relief Measures
– Tax rate for companies reduced from 35% to 32%
Exemption of profit/gains for electricity transmission projects for 10 years, provided set up by June 30, 2018
Increase in limit of tax credit to 1.5 million for new investment in shares of companies
20% increase in tax credit for companies enlisting in any registered stock exchange
Advance income tax on vehicle’s token tax reduced from 20 to 25% for filers; on transfer reduced by 75% for filers and one-third for non-filers
Capital limit for small companies to enhance to Rs 50 million
Tax rate reduced to 2% for salaried taxpayers earning Rs 400,000 to 500,000; For non-salaried with same income, tax rate reduced to 7%
Tariff slabs reduced from seven to six and maximum rate from 25% to 20%
Levy of Rs 0.75 federal excise duty per filter rod of cigarettes
Increase in Sales Tax on imported mobile phones to Rs 300, 500 and 1000 from Rs 150, 250 and 500
Duty increased on aerated waters from 9 to 12%

Abolition of SROs:
Powers of FBR to issue exemptions/concessions stands withdrawn
Mark-up on housing loans obtained by individuals for construction or buying a house to be allowed as deduction against income up to 50% of taxable income or Rs. 1 million
Minimum tax on builders for business of construction and sale of residential and other buildings to be exempted till June 30, 2018
Capital Gains of seller of a property to REIT development scheme to be exempt from Income Tax up to end of fiscal 2018
Supply of bricks and crushed stone to be exempted from sales tax for three years
Companies employing more than 50 employees duly registered with Social Security and EOBI, an employment tax credit equalling 1% of the income tax payable for every 50 employees may be provided to the company, subject to a maximum of 10%
Exemption on investment in Greenfield to be extended up to June 30, 2017
Five-year exemption to companies manufacturing equipment, plant and items related to solar and wind energy
Three-year income tax holiday for setting up and operating cold chain and warehouse facilities for agriculture produce if set up before June 30, 2016
Four-year tax exemption for `halal’ meat companies if they obtain `halal’ certification by end of 2016
Exemption from minimum tax for rice mills for the tax year 2015
Fish to be enlisted among the agriculture produce having exemption from deduction of withholding tax
Extension of sales tax and customs duty on import of solar penals by one year to June 30, 2016
Exemption from Customs Duty and Sales Tax for aircraft, maintenance kits for trainer aircraft, spare parts for use of aircraft, trainer aircraft and simulator and operational tools, machinery, equipment and furniture on one time basis for authorized Greenfield airports
Air routes in Gilgit Baltistan, Makran Coastal belt, Azad Jammu and Kashmir, Chitral and FATA to be exempted from FED and withholding tax

Relief Measures for Khyber Pakhtunkhwa
Five years Income Tax holiday and turnover tax on all new manufacturing units set up in KP between next three fiscals.
Exports of perishable goods to from KPK to Afghanistan to be allowed against Pak currency instead of dollars
Quota for ghee and vegetable oil under DTRE for export to Afghanistan and Central Asia to be enhanced three times
Decision by Afghan government to abolish financial guarantees equivalent to 110% of the Custom duty by Afghanistan on Pak exports to Central Asia