Another Mini-Budget to Wreak Havoc Next Month: Report

Another mini-budget or the ‘Finance (Supplementary) Bill-II’ is on the cards as the government contemplating withdrawing more sales tax exemptions next month.

The development was reported by Business Recorder, and if the bill is promulgated, the government may remove the additional exemptions on fertilizers, pesticides, and tractors to devise a more equal funding mechanism for these sectors next month or in the Budget 2022-23.

It is expected that the government will assess the remaining sales tax exemptions and concessions offered to various sectors as part of the procedure. If required, the exemptions will be revoked.

The Finance (Supplementary) Bill-II 2022 may just be a change in the recent supplementary amendment that took effect on 16 January as the government had previously targeted sales tax exemptions worth Rs. 343 billion through the bill, slashing nearly 60 percent of all exemptions under the fiscal framework.

However, the government will need more time to design a more inclusive subsidy scheme to replace tax expenditures on fertilizers, pesticides, and tractors, which currently account for 23 percent of total tax expenses, and which will be implemented in the next year’s budget following discussions in the government’s Fertilizer Commission.

Considering the above, if the government decides to enforce another supplementary bill, it is expected that tax exemptions that were left out of the previous budgetary accord will be withdrawn as early as next month.



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