Pakistan's federal budget FY23-24, up 51%, to benefit construction

Federal Minister for Finance and Revenue Senator, Mohammad Ishaq Dar, announced the Budget for the next fiscal year, FY23-24, with a total budgeted outlay of PKR14.5trn (US$50.53bn), up 51 per cent compared to the budgeted cost of FY22-23, on 9 June. Arif Habib, JS Global, Al Meezan Investment, and other research houses have presumed that the federal budget for FY23-24 would impact the cement industry as 'Neutral' to 'Positive'.

Cursory looks indicate that tax measures directly or indirectly benefit the cement, steel, glass and other industries associated with construction in Pakistan.

Budget measures
• Public Sector Development Programme (PSDP) budgeted for FY23-24 is at PKR950bn, 33 per cent higher than PKR714bn for FY22-23. Whereas allocation for provinces has jumped up to PKR1.6trn, taking the overall PSDP to PKR2.5trn vis à vis PKR2.3trn last year.
• The bill has proposed that for FY24-26, individuals will be entitled to a 10 per cent tax credit (up to a maximum of PKR1m) for building a new house. Advance Final Tax of two per cent on buying immovable property through foreign remittance to be abolished.
• Income of builders on new construction projects will be reduced by 10 per cent or PKR5m, whichever is lower, for the FY24-26.
• PKR157bn allocated to National Highway Authority (NHA) for construction of motorways and bridges (55 per cent growth over revised FY22-23 number).