Federal Minister for Finance, Revenue and Economic Affairs Asad Umar presented a mini-budget, the government’s plan for how much money it will earn and where it will spend it in the ongoing financial year.

The mini-budget is a revised version of the budget presented by the former government of PML-N. It was presented in the National Assembly on Tuesday.

Two points stand out. The government wants to protect low-income and poor people and has tried to pass on new taxes to those who earn more. Secondly, it wants to support agriculture and industry and make them competitive in exports so they create jobs and earn foreign exchange.

Key points:

Overall

The budget deficit (loss), because the government will spend more than it will earn, will balloon by Rs890 billion to Rs2.7 trillion or 6.6% of GDP. This is its highest-ever level, compared to what the previous budget stated (Rs1.89 trillion or 4.9% of the GDP).

The government’s revenue will drop Rs350 billion and expenses will increase Rs250 billion, according to the revised estimates.

Development (schools, clinics, roads)

The government has raised the development budget 10% from Rs661 billion to Rs725 billion.

Rs50 billion will be spent on Karachi projects

CPEC projects will continue without any cuts

Taxes on income

There will be no income tax if your annual income is Rs400,000 or less.

There will be a fixed tax of Rs1,000 if your annual income is Rs800,000 or less.

There will be a fixed tax of Rs3,000 if your annual income is Rs1.2 million or less.

If your annual income is more than Rs1.2 million, but less than Rs2.4 million, you will pay 5% of the amount that exceeds Rs1.2 million.

If your annual income is more than Rs2.4 million, but less than Rs3 million you will pay Rs60,000 plus 15% of the amount above Rs2.4 million.

If your annual income is more than Rs3 million, but less than Rs4 million, you will pay Rs150,000 plus 20% of the amount above Rs3 million.

If your annual income is more than Rs4 million, but less than Rs5 million, you will pay Rs350,000 plus 25% of the amount above Rs4 million.

If your annual income is more than Rs5 million, you will pay Rs600,000 plus 29% of the amount above Rs5 million.

If your annual income is more than Rs5 million, you will pay Rs600,000 plus 29% of the amount above Rs5 million

Tax on non-filers

The government will charge 0.6% tax on non-cash transactions above Rs50,000 (up from 0.4%).

But non-filers can buy new cars and property because they government has removed the blanket ban, which barred non-filers from purchasing new assets.

Items which will become expensive

Duties on 300 luxury items will go up.

These include luxury cars (1800 cc and above), imported food (think cheese) and high-end mobile phones.

Duties on cigarettes will also go up.

Subsidies

The government will give Rs100 billion as a subsidy in the petroleum tax, which means they will now collect Rs200 billion in petrol tax as opposed to Rs300 billion suggested previously.

Farmers will get subsidies of up to Rs7 billion on urea (fertilizer) purchases.

Punjab-based industries will get gas at subsidized rates as Rs44 billion have been allocated.

The government has also given a Rs4.5 billion subsidy for the construction of 8,276 low-cost houses for the labour class.

The government is introducing a health card for residents of Islamabad and FATA. It will provide a subsidy of Rs540,000 per family.

The government has removed duties from 82 imported items that are used in export-oriented industries and announced a Rs5 billion subsidy for this purpose.

The government has increased pensions by 10% for low-income pensioners (about 85% of total pensioners).