Reformist Measures Could

Unlock Growth Potential

Federal Budget Review FY22

12th June, 2021

KASB Research
research@kasbsec.pk
Executive Summary
 Pakistan has revealed a “Budget For The Masses”, intending to drive growth of 4.8% under an outlay of PKR 8.49tn (+19%). The government
aims to push for inclusive and sustainable growth by enhancing measures towards the social safety net for the poor, increasing development
spending, restructuring circular debt along with power subsidies, rationalizing taxes, and implementing a carrot & a stick approach to
document the economy. As the economy recovers from the pandemic, the Budget FY22 envisages a progressive spending to vaccinate nearly
half (100mn people) of its population.
 The government is targeting a fiscal deficit of 6.3% with revenue collection of PKR 5.83tn (+18%), primarily from Sales Tax, while non-tax
revenue is estimated at PKR 2.08tn (+30%), primarily from dividends (OGDC and PPL) and petroleum levy. Despite the history of fiscal
slippages, Pakistan can broadly achieve the fiscal target as more efforts are garnered in putting an end to informal economy whilst taxing the
e-commerce and other digital platforms.
 Budget also aims to address the perennial problem of enhancing the tax net for Pakistan, introducing nominal tax measures towards Small
and Medium Enterprises (SMEs) and special tax measures for Information Technology (IT) and IT services. Moreover, tax incentives for using
Point Of Sale (POS) devices are targeting 0.5mn retailers/wholesalers against c.11,000 retailers with POS.
 National PSDP target of PKR 2.14tn entails a Federal PSDP target of PKR 900bn (+43%) and Provincial contribution of PKR 1.24tn (+83%).
Enhanced focus on housing and construction activity along with dam construction and CPEC projects bodes well for overall growth in the
economy.
 In order to keep inflation within the budget target of 8.2%, the government has also introduced power sector subsidies which point towards
efforts to keep energy tariffs constant for the most part of FY22. While talks with the IMF continue to progress, the budgeted subsidies point
towards moderate discussions with the Fund’s staff as Pakistan treads along the EFF program during FY22.
Executive Summary
 Alongside actions to mitigate inflationary pressures, there is enhanced focus on the population at the bottom of the pyramid. The
government is targeting interest-free loans for business up to PKR 0.5mn each for 4-6mn families. Such families will also be offered a low-
cost housing loan up to PKR 2.0mn and free technical training to one individual. This is besides the PKR 260bn allocation for Ehsaas program
which serves impoverished people of the nation.
 After ages, Pakistan’s government has taken pro-stock market investor measures by reducing the CGT to 12.5% (down 2.5ppts), reducing
turnover tax to 1.25% (down 0.25ppts) and removal of WHT on margin financing.
 Despite the 40% rebound during FY21TD, the valuation discount is astonishing, where KSE-100 is trading at a FY22E PE of 6.7x, nearly 32%
discount to its mean. We remain Overweight on Cyclical stocks including, Cement, Steel, Textile and Autos.
Receipts (PKR bn) FY20B FY20R FY21B FY21R FY22B YoY Expenditure (PKR bn) FY20B FY20R FY21B FY21R FY22B YoY
Tax Revenue 5,822 4,208 5,464 4,691 5,829 24% Interest Payments 2,891 2,709 2,946 2,851 3,060 4%
- FBR Taxes 5,555 3,908 4,963 4,691 5,829 24% Pension 421 463 470 470 480 2%
- Other Taxes 267 300 501 - - nm Defence Affairs & Services 1,153 1,227 1,289 1,295 1,370 6%
Non Tax Revenue (old
format) 894 1,296 1,109 - 2,080 nm Grants and Transfers 831 1,177 905 932 1,168 29%
Non Tax Revenue 1,162 1,596 1,610 1,704 2,080 22% Subsidies 272 350 209 430 682 226%
Gross Revenue 6,717 5,504 6,573 6,395 7,909 24% Running of Civil Govt. 431 446 476 488 479 1%
less Provincial Share 3,255 2,402 2,874 2,704 3,412 26% Provision for Pay & Pension 194 - - - 160 nm
Net Revenue 3,462 3,102 3,700 3,691 4,497 22% Provision for contingencies - - 50 - 25 -50%
Provision for
Provincial surplus 242 242 570 136% Disaster/Emergency/COVID - - 100 nm
Capital Receipts 833 967 1,326 1,701 1,440 -15% Current Expenditure 6,193 6,373 6,345 6,561 7,523 19%
External Receipts 1,829 1,283 810 815 1,246 53% Federal PSDP 701 564 650 630 900 38%
Provincial Surplus 423 (81) 242 242 570 135% Net Lending 57 142 72 64 -11%
Bank Borrowing 339 1,724 889 889 681 -23% Other Dev. Expenditure 86 66 70 32 - nm
Privatization Proceeds 150 150 100 - 252 nm Development Expenditure 843 772 792 662 964 22%
Total Receipts 7,036 7,145 7,136 7,141 8,487 19% Total Expenditure 7,036 7,145 7,136 7,141 8,487 19%
Federal budget deficit (3,437) (3,450) (3,990) 16% - budget deficit % of GDP -7.5% -7.6% -7.4%
Fiscal deficit (3,194) (3,208) (3,420) 7% - fiscal deficit % of GDP -7.0% -7.0% -6.3%
Primary deficit (249) (249) (360) 45% - primary deficit % of GDP -0.5% -0.5% -0.7%
Nominal GDP 45,567 45,567 53,867 18%
Source: Budget FY22, KASB Research
 Pakistan Fiscal Operations
Pakistan Fiscal Operations (PKR bn) 9 month performance Budgetary allocations % of GDP
9MFY20 9MFY21 YoY FY19 FY20B FY20R FY21B FY21R FY22B FY19 FY20B FY20R FY21B FY21R FY22B
Revenue 4,690 4,993 6% 4,901 6,717 5,504 6,573 6,395 7,909 12.7% 15.3% 13.2% 14.4% 13.4% 14.7%
Tax 3,594 3,765 5% 4,473 5,822 4,208 4,963 4,691 5,829 11.6% 13.2% 10.1% 10.9% 9.8% 10.8%
FBR 3,044 3,395 12% 3,829 5,555 3,908 4,963 4,691 5,829 9.9% 12.6% 9.4% 10.9% 9.8% 10.8%
- Direct 1,146 1,246 9% 1,446 2,082 1,623 2,043 1,789 2,182 3.7% 4.7% 3.9% 4.5% 3.7% 4.1%
- Indirect 1,898 2,149 13% 2,384 3,473 2,285 2,920 2,902 3,647 6.2% 7.9% 5.5% 6.4% 6.1% 6.8%
- CD 474 541 14% 685 1,001 546 640 700 785 1.8% 2.3% 1.3% 1.4% 1.5% 1.5%
- GST 1,242 1,416 14% 1,465 2,108 1,427 1,919 1,927 2,506 3.8% 4.8% 3.4% 4.2% 4.0% 4.7%
- FED 182 192 5% 234 365 312 361 275 356 0.6% 0.8% 0.7% 0.8% 0.6% 0.7%
Others 534 534 0% 628 267 300 - - 1.6% 0.6% 0.7% 0.0% 0.0% 0.0%
Non-tax 1,096 1,166 6% 427 894 1,296 1,610 1,704 2,080 1.1% 2.0% 3.1% 3.5% 3.6% 3.9%
Gross revenue 4,307 4,561 6% 4,436 6,717 5,504 6,573 6,301 7,909 11.5% 15.3% 13.2% 14.4% 13.2% 14.7%
less: Provincial share 1,932 1,986 3% 2,398 3,255 2,402 2,874 2,704 3,412 6.2% 7.4% 5.8% 6.3% 5.7% 6.3%
Net revenue 2,375 2,575 8% 2,038 3,462 3,102 3,700 3,597 4,497 5.3% 7.9% 7.4% 8.1% 7.5% 8.3%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Expenditure 6,393 6,808 6% 8,346 8,238 8,135 7,231 7,137 8,487 21.6% 18.7% 19.5% 15.9% 15.0% 15.8%
Current expenditure 3,946 4,224 7% 7,104 7,288 7,376 6,345 6,561 7,523 18.4% 16.6% 17.7% 13.9% 13.8% 14.0%
Mark-up 1,880 2,104 12% 2,091 2,891 2,709 2,946 2,851 3,060 5.4% 6.6% 6.5% 6.5% 6.0% 5.7%
Defence 802 784 -2% 1,147 1,153 1,227 1,289 1,295 1,370 3.0% 2.6% 2.9% 2.8% 2.7% 2.5%
Grants and transfers 421 491 16% 470 835 1,177 905 932 1,168 1.2% 1.9% 2.8% 2.0% 2.0% 2.2%
Pension 332 329 -1% 393 421 463 470 470 480 1.0% 1.0% 1.1% 1.0% 1.0% 0.9%
Running of Civil Government 341 312 -8% 463 431 484 477 488 479 1.2% 1.0% 1.2%
Subsidies - 204 nm 175 272 350 209 430 682 0.5% 0.6% 0.8% 0.5% 0.9% 1.3%
Pay and Pension - - nm - - - - - 160 0.0%
Provision for Disaster/Emergency/COVID - - nm - - - - 95 100 0.0%
Others - - nm NA 0 - 0 - 25 NA 0.0% 0.0% 0.0% 0.0% 0.0%
Foreign Loans Repayment - - nm NA 1,095 1,245 1,229 842 1,428 NA 2.5% 3.0% 2.7% 1.8% 2.7%
Development expenditure 752 723 -4% 1,178 950 759 886 764 964 3.1% 2.2% 1.8% 1.9% 1.6% 1.8%
Federal PSDP 340 264 -22% 502 701 564 650 630 900 1.3% 1.6% 1.4% 1.4% 1.3% 1.7%
Outside PSDP 382 390 2% 506 86 66 - - - 1.3% 0.2% 0.2% 0.0% 0.0% 0.0%
Other development expenditure 29 14 -52% 170 163 129 70 32 - 0.4% 0.4% 0.3% 0.2% 0.1% 0.0%

Fiscal balance (1,686) (1,686) (3,445) (3,141) (3,797) (3,195) (3,195) (3,420) -8.9% -7.1% -9.1% -7.0% -6.7% -6.3%
Statistical discrepancy (17) (164)
Primary balance 194 452 (1,354) (250) (1,088) (249) (249) (360) -3.5% -0.6% -2.6% -0.5% -0.5% -0.7%
GDP 44,003 45,567 38,559 44,003 41,727 45,567 47,709 53,867
Source: Ministry of Finance, Budget FY22, KASB Research
Promising Growth Target
 The government has an aggressive GDP growth target of 4.8% for FY22, Economic Indicators FY19 FY20 FY21B FY21R FY22B FY23E
underpinned by agriculture growth of 2.0%, manufacturing growth of 5.5% and Real GDP Growth 3.30% 2.40% 2.10% 3.94% 4.80% 5.70%
services growth of 4.9%. Inflation 7.20% 11-13% 6.50% 9.00% 8.20% 7.20%
Fiscal Deficit 7.20% 7.10% -7.00% -7.10% -6.35% -5.30%
 Total revenue collection target of PKR 7.9tn (14.7% of GDP) is expected to keep Revenue % of GDP 14.50% 16.70% 14.40% 13.40% 14.70% 14.90%
Tax-to-GDP 12.60% 14.40% 10.90% 9.80% 10.80% 11.50%
fiscal deficit within 6.4%. GDP Mkt Prices - PKR bn 38,559 44,003 45,567 47,709 53,867 60,811
 Most of the spending during FY22 is towards interest payments (PKR 3.06tn; +4%), Source: Budget FY22, KASB Research

grants (PKR 1.17tn; +29%) and subsidies (PKR 682bn; +226%).

 The rise in subsidies target is hard evidence of incentives to several sectors for Deficit financing (PKR bn)
FBR Tax Revenue 5,829 Gross External Loans 2,748
substantial growth. Non Tax Revenue 2,080 Less Repayments 1,502
less: Provincial Share 3,412 Long Term foreign Loans 1,428
 With no budgetary borrowings from SBP in sight, most of the deficit financing lies Net Revenue 4,497 Short Term foreign Loans 74
in external resources and capital receipts. Current Expenditure 7,523 Net External Financing 1,246
Interest Payments 3,060 Net Domestic Financing 681
 The government is targeting capital receipts of PKR 1,200bn (+168%) from Ijara Pension 480 Commercial Bank Financing 681
Defence Affairs & Services 1,370 SBP Financing -
Sukuk issuance in FY22 (read: MEBL). Grants and Transfers 1,168 Non Bank Financing 1,493
Subsidies 682 Public Debt 1,167
Running of Civil Govt. 479 Permanent Debt 1,974
Other current expenditure 284 Floating Debt (808)
Development Expenditure 964 Public Account 74
Federal PSDP 900 NSS 66
Net lending 64 GP Fund/Dep & Res 8
Estimated Provincial Surplus 570 Privatization Proceeds 252
Fiscal Deficit 3,420 Total Financing Of Deficit 3,420
Source: Budget FY22, KASB Research
Eurobond/Sukuk issuance targeted at c. USD 3.5bn
 A nearly similar amount to the permanent debt from PIBs and Sukuk issuance is Foreign Assistance (PKR bn) FY21B FY21R FY22B
being targeted under Foreign Assistance. For PSDP 239 257 292
Outside projects 45 58 23
 The budgetary document points towards an international bond issuance of USD Program Loans 504 440 438
ADB 143 150 134
3.5bn in terms of either Eurobond or International Sukuk planned for FY22. AIIB 83 40 48
 Recall that Pakistan successfully made a Eurobond issuance of USD 2.5bn with IBRD
IDA
23
252
59
188
183
64
healthy international participation under the Global Medium Term Note (GMTN) IFAD - 3 2
OFID - - 8
program which can feasibly allow the government to become a regular issuer in Other Loans 1,436 1,532 1,995
the international capital markets. IBD (Short-term) 165 129 160
Saudi Arabia (Short-term) 165 - -
 Simultaneously, IMF’s loan for budgetary support is also being targeted to the tune Euro Bond/Int'l Sukuk 248 403 560
of c. USD 3bn. Commercial Banks 647 762 779
China Safe Deposits - 161 -
 On the other hand, subsidies amounting PKR 136bn towards the power sector have IMF Loan for Budgetary Support 211 77 496
Source: Budget FY22, KASB Research
been sought. This indicates the government may likely keep the energy tariffs
unchanged for the most part of FY211.
Subsidies (PKR bn) FY21B FY21R FY22B
Subsidy to WAPDA/PEPCO 124 350 511
IPPs - - 136
Subsidy to Petroleum 10 12 20
Subsidy to KESC 16 16 85
Subsidy to USC 3 8 6
Subsidy to PASSCO 7 7 7
Subsidy to NFS&RD - - -
Others* 50 37 53
Total Subsidies 209 430 682
Source: Budget FY22, *PKR 30bn for NPHA
Tax target require great efforts; levy can be inflationary
 Most of the tax collection target is hinged on Income Tax collection of PKR 2.17tn
and Sales Tax of PKR 2.51tn. Tax Revenue (PKR bn) FY21B FY21R FY22B YoY
FBR taxes 4,963 4,691 5,829 24%
 Enhancement in Income Tax collection is likely to be undertaken by progressive Direct Taxes 2,043 1,789 2,182 22%
measures on the wealthy business groups and families. Income Tax 2,033 1,780 2,172 22%
Others 10 9 10 12%
 On the other hand, Sales Tax collection is likely to enhance from digitization of Indirect Taxes 2,920 2,902 3,647 26%
wholesalers and retailers. The government plans to offer various incentives to the Sales Tax 1,919 1,927 2,506 30%
Customs Duties 640 700 785 12%
mom and pop storeowners. FED 361 275 356 29%
 Recall that, Services sector grew by 4.43% in FY21 mainly on the back of wholesale Province-wise share 2,874 2,704 3,412 26%
Punjab 1,439 1,323 1,691 28%
and retail trade (+8.4%) and finance and insurance sector (+7.8%). Sindh 742 680 848 25%
 In addition to this, the government has witnessed a steep rise in online KPK 478 443 559 26%
Balochistan 265 258 313 22%
transactions and e-commerce in the wake of COVID19. We believe the attempt to Tax Refund (50) - - nm
bring online transactions into the sales tax net is a great move and it can enhance Non-tax revenue 1,610 1,704 2,080 22%
revenue collection. Levies & Fees 26 18 30 60%
Income from property & enterprise 211 177 266 50%
 We believe the petroleum levy collection target of PKR 610bn (+36%) is inflationary PTA (3G/4G licences) 27 34 45 34%
in nature. Considering the current POL item demand, the government may have to Receipts from Civil and others 646 728 684 -6%
SBP Profits 620 700 650 -7%
keep levy near PKR 30/liter for nearly the entire FY22; levy is currently PKR Miscellaneous 728 781 1,101 41%
4.80/liter. Petroleum levy 450 450 610 36%
GIDC 15 15 130 767%
Source: Budget FY22, KASB Research
Sector-wise Impacts
 Sector-wise impacts
Sector Proposal
 CGT has been reduced by 2.5pps to 12.5%
 Non-resident individuals maintaining a foreign current value account
will not be subject to a 100% increase in taxation in case their name
Brokerages does not appear in the active tax payer’s list
and Market  WHT removal on margin financing
 Reduction in turnover tax to 1.25% from 1.5%
 Removal of 0.02% of purchase/sale value on transaction
 Sales tax on domestically assembled cars under 850cc has been
reduced by 4.5pps to 12.5%
 FED on cars under 850cc has been removed
Automobile  GST on the import and domestic supply of EVs has been reduced to
8.5% for 1800cc and lower variants and 12.75% for variants
exceeding 1800cc
 Taxation on “own” money will be implemented if vehicle is sold
prior to registration
 The super tax of 4% is expected to continue indefinitely
 PKR 751bn will be raised via PIBs while PKR 1,200bn will be raised
Banking
via Ijarah Sukuk to finance the budget deficit.
 Withholding tax will not be applicable on the cash withdrawal, bank
transactions, and banking instruments
Impact Comment Scrips we like
 The reduction in CGT is likely to bode well for market
AHL, NEXT, PSX, JSGCL,
Positive sentiments, likely instigating increase activity at the
EFGH
bourse.
 The reduction in both GST and FED will increase the
affordability of smaller vehicles. The offerings of PSMC,
particularly Alto, is likely to benefit from a PKR 0.1mn
reduction in selling price, potentially instigating demand.
Positive  Taxation on “own’’ money may potentially hamper PSMC, HCAR
momentum derived from investment sales
 The continuation of the super tax is likely to keep the
banking sector’s effective taxation to 39%
 The planned target of raising PKR 1,200bn through Ijarah
Neutral Sukuk is likely to offer Islamic Banks additional avenues MEBL
for investments
 The removal of WHT of banking transactions will bode
well for the healthy growth of the industry’s deposits
 Sector-wise impacts
Sector Proposal Impact Comment Scrips we like
 Development outlay increased to PKR 2,102bn, of which Federal
PSDP has increased by 43% to PKR 900bn. Within the segment, PKR  The increase in development budget is likely to instigate
114bn has been earmarked for hydro-electric projects and PKR construction activity emanating from the public sector.
114bn will be set for the National Highway Authority

 The extension on the construction amnesty scheme by 6

 PKR 30bn in subsidy allocated for Naya Pakistan Housing Scheme in LUCK, DGKC, MLCF,
months may induce additional builders to avail the
Cement, addition to PKR 3bn as mark-up subsidy PIOC, CHCC, KOHC,
construction package
Steel and Positive FCCL, GWLC, FLYNG,
Allied  Reduction/exemption of CD, ACD and RD on the import of Flat-rolled  The industry support package is expected to continue ASTL, MUGHAL, TGL,
products including HRC and stainless steel benefitting the cement sector GHGL
 The reduction in CD, ACD and RD on the import of HRC
 PKR 37bn earmarked for the industrial support package and steel is likely to benefit both flat-steel manufacturers
and steel pipes manufacturers
 The time period for registering for the construction amnesty scheme
has been increased to Jun 30’21
 Reduction/exemption of CD and ACD on raw materials for electronic
manufacturing industry  Producers of electronic goods are likely to benefit from
Electronics Positive PAEL, WAVES
 Advance tax on sales to retailers of electronic goods has been reduced raw material costs from the reduction in duties
reduced by 0.5pps to 0.5%.
 PKR 150bn is targeted to be collected as GIDC
 GIDC collection has been set at PKR 150bn, likely from the
Fertilizers  Dealers of fertilizers shall be charged a rate of 0.25% as advance tax Neutral None
overdue amount originating from the fertilizer sector
if they appear on the Active Taxpayer’s List
 Sector-wise impacts
Sector Proposal Impact Comment Scrips we like
 The government projects a 48% YoY increase in dividend income  The targeted PKR 610bn in PDL collection roughly
from its investment holdings estimates to a PKR 30/litre on the sale of POL products
Oil & Gas  The government expects a 48% YoY jump in dividend OGDC, PPL
Neutral
Sector  Target for petroleum levy set at PKR 610bn income from its holdings, which include OGDC & PPL,
likely on anticipation of improving circular debt.
 OMCs turnover tax maintained at 0.75%
 The exemption of duties on APIs may support the
 Exemption of CD and ACD on the import of 350 APIs
pharmaceutical industry’s margins
 The reduced rate of imports on pharmaceutical
 Plant, machinery and equipment subject to concessionary rate of 5% machinery and equipment may incentivize investments FEROZ, HINOON,
Pharma Positive into the sector. SEARL, GLAXO
 Exemption of CD & ACD on raw material of auto-disable syringes and
Reduction in tariff on finished auto-disable syringes
 Exemption of CD & ACD on 06 life-saving drugs
 A special plan is in the works to curb the accumulation of the circular  The focus on curbing the circular debt will bode well for
debt. the power sector
 The government plans to prioritize the reduction of line-losses
Power  The plan to reduce T&D losses through infrastructural HUBC, KAPCO, PKGP,
through infrastructural investments. PKR 70bn has been set for FY22, Positive
Sector investments will help reduce circular debt growth EMCO, PECO, PCAL
PKR 52bn for FY23 and PKR 61bn for FY24.
 Certain companies providing electrical equipment may
 PKR 596bn has been earmarked for the power sector subsidy.
benefit from increased demand
 Property income will be shifted to a normal tax regime.
 The move is aimed to rationalize the tax regime on real-
Real Estate  Taxation will be reduced on the disposable of properties with gains Neutral TPLP, DCR
estate sector
exceeding PKR 20mn.
 Sector-wise impacts
Sector Proposal Impact
 10-year exemption from tax on income of deep conversion new
refineries and upgradation, modernization or expansion projects of
existing refineries of at least 100,000bpd capacity.
Refineries Positive
 Removing zero-rating from crude petroleum, potentially yield net
revenues of PKR 85bn.
 Reduction on turnover tax by 0.25pps to 0.5%
 Exemption from tax for bagasse fired power generating units and
reduced rate of 7.5% on dividend income from such projects.
Sugar Positive
 Sales tax on sugar is proposed to be levied on the retail price.
 Reduction of RD on export of molasses
 It is proposed that export of services may be zero-rated for the IT
sector
 Import of plant, machinery, equipment and raw materials for
consumption of these items within Special Technology Zone by the
Special Technology Zone Authority, zone developers and zone
enterprises
Technology Positive
 IT services including software development, maintenance, and design
will be classified as an industrial undertaking
 Technology companies can benefit from a 100% tax credit provided
80% of the export proceeds are brought into Pakistan
Comment Scrips we like
 The exemption on tax for new refineries may incentivize
investments into the sector. BMR projects can also pick
pace of existing refineries.
BYCO, NRL
 The reduction in turnover tax can potentially benefit the
low-margin industry
 Bulk of sugar companies utilize their leftover bagasse to
fire specialized power plants. Dividends from these
CHAS
projects will now benefit from a reduced taxation rate of
7.5%.
 The implementation of a Special Technology Zone and the
attached exemption of sales tax on the import of
machinery and raw material may incentivize investments
into the sector
 The tax credit of 100% for companies bring their export SYS
proceeds within Pakistan may enhance profitability.
Within the space, Systems Limited (SYS) is likely to
achieve the requisites.
 Sector-wise impacts
Sector Proposal Impact Comment Scrips we like
 Reduction in FED will bode well for the
 FED will be reduced by 1pps on the telecommunication sector to 16%.
telecommunications sector.
 PKR 1.0 FED will be imposed on calls exceeding 3 minutes, PKR 0.1 per
 The higher taxation on call may limit growth
SMS and PKR 5 per GB.
Telecom Neutral PTC
 PKR 45.4bn is expected to be raised from the sale of 3G/4G licenses
 The telecommunication companies operating under PTA will be
classified as an industrial undertaking
 Reduction/exemption of CD, ACD and RD on the import of goods for  The reduction in duties may alleviate the sector’s working
the textile industry. capital requirements
 The increase in minimum wage may constrict the labour-
 Minimum wage increased by PKR 2,500/month to PKR 20,000/month NML, GATM, IMAGE,
Textile Neutral intensive sector’s margins
ILP
 Allocation of PKR 20bn subsidy to provide concessionary gas
 GST increased to 17% from 10% on import of raw and ginned cotton

 The footwear and the paints industry will likely benefit

 Reduction of duties on raw material/inputs of footwear industry
from the reduced cost of importing their raw materials
 The reduction in FED on juices is likely to benefit the
 FED will be reduced on Juices
package juice industry
 The exemption of sales tax on ghee, etc. will provide SRVI, BERG, SHEZ, FFL,
Misc.  Reduction of duties on raw material/inputs of paints industry Positive
protection to local players UNITY
 Reduction of CD & ACD on uncoated paper and paperboard for
printing and graphic arts industry
 Changes in GST exemption on local supply of Ghee, Cooking Oil, Juices,
Edible oil, Butter, Yogurt, Meat
Thank You