Dar unveils highest-ever budget of Rs5,310b

bud1.png

-Keyword Room


ISLAMABAD: An incentive and relief laden federal budget with a total outlay of 5,310 billion rupees has been announced for the next fiscal year.

Finance Minister Ishaq Dar presented budgetary proposals for the next year in the National Assembly session in Islamabad on Friday.

The resource availability during next year has been estimated at 4,681.2 billion rupees and net revenue receipts at 2,926 billion rupees. Tax collection by FBR is estimated at 4,013 billion rupees.

The provincial share in federal taxes is estimated at 2,384.2 billion rupees, which is 11.6 percent higher than the budget estimates of the outgoing fiscal year.

The external receipts during next year are estimated at 837.8 billion rupees.   The budget envisages defense allocations of over 920 billion rupees.

The budget envisages merger of fifty percent ad hoc relief allowance granted to civil employees and ad hoc allowances of 2009 and 2010 for personnel of armed forces with the salary and ten percent ad hoc relief allowance on the basic salary after merger.  Zarb-e-Azb allowance for armed forces personnel will be in addition to this.

The Minister announced ten percent increase in pensions.

Minimum wages have been increased from the existing 14000 to fifteen thousand per month.

Several allowances of different categories of employees have also been increased.  These include sixty percent increase in daily allowance rate, enhancement of orderly allowance from 12000 to 14000 rupees, increase in the rate of burial grant from 1600 to 4800 and from 5000 to 15000 rupees; constant Attendant Allowance from 3000 to 7000 rupees and fifty percent increase in design allowance.

Batman allowance and Hardlying Pay for Pakistan Navy and different allowance of Pakistan Post have also been increased.

Personnel of Frontier Constabulary would get a fixed monthly allowance of eight thousand rupees irrespective of their deployment in any part of the country.

The finance minister said the government will bear an additional burden of 125 billion rupees because of relief to government employees.

The finance minister announced launching of a new national saving scheme for the welfare of family members of martyrs.

Under this scheme, heirs of martyrs of Pakistan Army, police and other security institutions will get an extra profit.

Pakistan Savings will bring their branches online and introduce ATM cards and mobile and internet banking for the benefit of its customers.

The budget of Pakistan Baitul Maal would be increased from the existing 4 to 6 billion rupees.

He announced revival of the scheme launched by PML (N) government in 1999 envisaging payment of all dues of HBFC mortgage by the widows.

The limit of loan for this scheme has been increased from three hundred thousand to five hundred thousand rupees.  He said a one billion dollar non-convertible bond would be issued to attract investment by overseas Pakistanis in the country’s infrastructure.

The Capital Development Authority will also announce a separate sector to afford opportunity to overseas Pakistanis to make secured investment in real estate.

The Finance Minister said all pending refunds of sales tax would be paid in two phases. Those involving one million rupee would be cleared by 15th of July and others by 14th of August this year.

Ishaq Dar also announced relief measures relating to sales tax and federal excise duty for different sectors of economy.

These include elimination of additional tax on lubricant oil by marketing companies, reduction in sales tax rates on import of hybrid electric vehicles at par with locally manufactured vehicles, automatic stay in cases related to federal excise duty till decision of appeal and elimination of withholding tax on supplies between registered individuals.

The Finance Minister said that sales tax rate has been reduced from seventeen to seven percent on several different types of machinery used in poultry sector.

Sales tax rate on multimedia projectors for use in educational institutions would be reduced from the existing seventeen to ten percent.

The Finance Minister said a package to provide relief in duties on import of electric vehicles would be announced within three months. Presently, ten important parts of trailers required local assembly can be imported on five percent concessionary custom duty.

Five percent regulatory duty on import of grandparent and parent stock of chicken is being abolished while the custom duty is being reduced from eleven to three percent. Eleven percent duty on hatching eggs is being reduced to three percent. He said that there will be custom duty exemption for import of new and five year old harvesters with a view to promote machine farming in the country.

The Minister also announced relief in custom duty for some items for some pharma and bio technology sectors.

The facility of duty free import of machinery, equipment, apparatus, appliances, wheel chairs, surgical and dental spares for fifty bed nonprofit hospitals and institutions would now also be applicable to hospitals run by armed forces, Fauji Foundation and Pakistan Atomic Energy Commission.

Regulatory duty on import of aluminum waste scrap, used in auto parts, fans and pottery is being reduced from the existing ten to five percent. Customs duty on import of raw material for baby diapers is being reduced from 16 to 11 percent.

Customs duty of 11 percent and 16 percent imposed on telecommunication equipment are being abolished and replaced with a uniformed nine percent regulatory duty.

Sixteen percent customs duty on veneer sheets is being lowered to 11 percent to stabilize timber sector.

The finance minister announced withdrawal of fixed tax per unit on builders and developers.

He said the rate of withholding tax for non-filers would be increased on contracts, sales, and services, payments to nonresidents, rental income, prize bonds, lottery, commission, auction, gas bills for CNG stations and sales by industrialists and importers to distributors, dealers, and wholesalers. However, the existing rates for filers would continue without any change.

The rate of withholding tax on dealers, distributers and wholesalers on electronic goods is being increased from the existing 0.5 percent to one percent.

The Finance Minister announced reduction in the rate of withholding tax on registration of vehicles by taxpayers.

The withholding tax on vehicles up to 850 CC is being revised from 10,000 to 7,500 rupees; for vehicles 851 to 1000 CC, the rate has been reduced from 20,000 to 15,000 and for vehicles between 1001 to 1300 CC 30,000 to 25,000 rupees. However, there will be no reduction in withholding tax for non-filers.

Vehicles purchased under Prime Minister Youth Loan Scheme would be exempted from the withholding tax.

The Finance Minister said federal excise duty on cement is proposed to be increased from one rupee per kilogram to one rupee and twenty five paisa per kilogram.

Sales tax on commercial imports of cloth is being increased to six percent to provide a healthy competitive environment for the local industry. Federal excise duty on cigarette has also been increased marginally.

In order to rationalize the rate of sales tax on steel sector, the existing rate of electricity is being increased from nine rupee per unit to ten point five rupee per unit.

Federal Budget proposes total development outlay of 2.5 trillion rupees for the next financial year, highest in the history of the country.

Federal development spending has been estimated at 1,001 billion rupee, which is twenty-five percent higher than the current financial year.  The cumulative provincial annual development plans were estimated at 1140 billion rupees, a 27% increase over current year. Corporations like WAPDA and NTDC would spend 400 billion rupees on developmental activities from their own resources.

Allocations for Azad Jammu and Kashmir have been enhanced from 12 to 22 billion rupees which will ensure rapid development process in the area. Gilgit Baltistan will also be given 15 billion rupees for its development projects as against 9 billion rupees during outgoing year. FATA’s development budget has been enhanced to 24.5billion rupees from 21 billion rupees.

Higher Education Commission will get 35 billion rupees, social sector 135 billion rupees and special measures have been proposed for the growth of IT sector during the next financial year.

Infrastructure gets priority in the new budget with huge allocations of 414 billion rupees including 320 billion rupees for National Highway Authority.

The budget envisages 404 billion rupee allocations for energy sector.

About 180 billion rupees have been earmarked for China-Pakistan Economic Corridor projects while social sector allocations have been increased from the existing 90 billion to 153 billion rupees.

The new budget envisages GDP growth rate of six percent for the next financial year as against 5.28% during outgoing year. Allocations have been made for cluster development in agriculture, minding and industry to secure growth in entire supply chain of value addition.

Exports are projected to grow by 6.4% next year to 23.1 billion dollar against estimated 21.7 billion dollar this year. Import growth target has been set at 9.6% to 50 billion dollar as against expected 45.7 billion dollar this year.

Finance Minister Ishaq Dar said it is the first time in the country’s history that a sitting prime minister and the finance minister are presenting their fifth fiscal budget. He said this reflects that the democracy has taken roots in the country and the entire nation can be proud of it.

Highlighting the performance of different sectors over the last four years, the Finance Minister said that the GDP growth witnessed growth of five point two eight percent during the outgoing fiscal year which is the highest in ten years while the fiscal deficit has been reduced to four point two percent from over eight percent when the present government took over the government.

Ishaq Dar pointed out that urban areas were facing power outages of twelve to fourteen hours and rural areas sixteen to eighteen hours four years ago. He said the international institutions had declared the macroeconomic situation of the country unstable. However, today the situation stands much improved as the country has been put on sustainable development.

The Finance Minister said that foreign exchange reserves are at stable position while revenue collection has been enhanced by eighty one percent over the last four years. Loans granted to the private sector for development purpose has increased by five times. He said during the current fiscal year, import of machinery saw an increase of over forty percent while gas supplies to the industries also stand improved.

He said that zero load shedding has been ensured to the industries while outages for domestic sector have also decreased significantly. He was confident that that the outages will be eliminated by next year.

He said the economic turnaround made by the country has also been recognized by the world leading financial institutions. Pakistan is being predicted to join G-20 group by 2030.

Ishaq Dar said that as against the previous governments, the incumbent government has taken loans for the development projects. He said investment in basic infrastructure will ensure sustainable development in the country.

He said according to the PML (N) election manifesto, reforms program was completed last September. During this period, some important structural reforms were introduced.

The Finance Minister said per capita income has gone up from 1334 to 1629 dollar during the last four years, representing 22% increase.

Fiscal deficit has been brought down from 8.2% in 2012-13 to 4.2% this year due to increased tax collection.

FBR receipts stood at just 1940 billion rupees in 2012-13 which are targeted to reach 3521 billion rupees this year, which shows 81% increase in four years.

The Finance Minister said imports during first ten months of the current financial year stood at 37.8 billion dollars. He said increased in imports is due to 40% increase in import of machinery and industrial raw material, increase in POL products prices and CPEC related projects.

He said exports in first ten months reduced by 7.8% as against same period last year.  However, the position has improved due to announcement of 180 billion rupee package by the Prime Minister for exporters.

He said foreign exchange reserves stood at 21 billion dollars while remittances by overseas Pakistanis reached 19.9 billion dollar last year and these reached to 15.6 billion dollars during first ten months of the current financial year.

The Finance Minister said market capitalization of stock exchange increased from 51 to 97 billion rupees in four years, representing 90 percent improvement.

The Finance Minister said allocations for BISP are being enhanced to one hundred and twenty one billion rupees  as against forty billion rupees in 2013.

He said the government is also focusing on the skill development of the BISP beneficiaries in order to help them stand on their own feet. In this connection, the government is also launching a new scheme.

He said under this program financial assistance of fifty thousand rupees and training  will be given to the BISP beneficiaries  who desire to start their own business. Initially, this assistance will be extended to two hundred and fifty thousand families.

The finance minister laid before the house the finance bill 2017-18.

He also laid before the house the supplementary demands for grants and appropriations for the financial year 2016-17. The house will now meet on Monday at four pm.—Radio Pakistan

loading...
loading...