ISLAMABAD: Minister of State for Revenue Hammad Azhar has unveiled the first budget for fiscal year 2019-20 of the Pakistan Tehreek-e-Insaf (PTI)-led federal government with an outlay of Rs7.02 trillion, in the National Assembly (NA) in Islamabad today (Tuesday).
In his budget speech, the minister said that the governemnt has a brought a new thought, new commitment and new approach to governance.
He said it is time to lift the people who have been left behind and recalled the economic situation the government has faced since coming into power.
Hammad Azhar said: “Pakistan s total debt has reach Rs31 trillion. We are deeply indebted thanks to high-interest loans. Foreign exchange reserves had dropped below $10 billion. The current account deficit had reached a historic peak of $20bn, while the trade deficit had reached $32bn. The fiscal deficit was more than Rs2.26tr.”
He said: “US$7 billion reduction in Current Account Deficit will be achieved this year, which will be 6.5 billion dollars next year.”
The minister said current account deficit will be reduced to 6.5pc in FY19-20 and exports will be boosted through a revised duty structure. “Power and gas will be cheapened and Free Trade Agreements will be re-evaluated,” he said and added Pakistan will be made a part of the international value chain.
Azhad said we borrowed a total of $9.2 billion from China, Kingdom of Saudi Arabia, and the United Arab Emirates, adding that the government empowered State Bank of Pakistan (SBP).
“A total of 11 per cent tax to GDP ratio currently, was the lowest in the region,” he said and added there were only 50 percent of SECP registered companies paying tax. “We will have to change this culture.”
The minister said that circular debt was reduced by Rs12 billion per month and it was brought down to 26 billion rupees from 38 billion rupees.
Given the current economic situation, Hammad Azhar said the government has acted with responsibility and taken steps for the economic stabilization, adding that we have increased import duty which helped us bring down imports from US$49 billion to US$45 billion.
He said remittances have witnessed an increase of US$2 billion, He said the IMF package will also help the country steer the economy towards stability.
Azhar went on to say that in Naya Pakistan, the culture of tax evasion will be overcome. Civil and Defense authorities have agreed to voluntary reduced in their budgets. The minister of state said our aim during the financial year 2019-20 will be to increase the tax net.
Regretting the low tax to GDP ratio, he said the country cannot make progress without payment of taxes. He appreciated the gesture of both the civilian government and the military leadership for voluntarily deciding to cut their expenditures.
The Asset Declaration Scheme will bring the undeclared assets into mainstream and help increase revenue of the government.
In the health sector, the key initiatives to widen the coverage of health care spending and achieve health targets include increase in the number of paramedical staff, expansion of lady health workers programme, strengthening of primary healthcare with backup of skilled personnel including women, medical officers in basic health units, establishment of health emergency surveillance and response system, implementation of a national plan for vaccination and establishing a health information and disease surveillance system.
Micro health insurance schemes will be made part of existing social safety nets to extend health coverage to the vulnerable segments of the society.
The government s planned initiatives for employment and skill development during the next year will help alleviate unemployment in the country. The plan focuses to provide and promote technical and vocational training by extending geographical access through the public private partnership in market demand trades.
- A ration card scheme is being introduced. 60,000 women will be given access to mobile phones.
- Rs1,800 billion kept for development programmes. Rs950 billion kept for federal development programme
- Civil budget decreased from Rs460 billion to Rs437 billion.
- Defence budget will remain Rs1.150 trillion
- Tax net will be increased as only 20,00,000 people in Pakistan file tax returns of them 600,000 are employees.
- Rs45.5 billion have been allocated for Karachi s development program
- Rs40 billion would be given in subsidy for gas and electricity
- Interest free loans would be provided to 80,000 deserving people every month
- Defence budget will remain Rs1.150 trillion
- Rs1,800 billion kept for PSDP, while Rs950 billion kept for federal PSDP
- BISP stipend has been increased from Rs5,000 to Rs5,500
- Rs421 billion have been allocated for pension
- Rs12 billion have been allocated for agricultural program
- 10 percent ad hoc relief for armed forces employees
- Pensions increased by 10 percent
- Employees from grad 1 to 16 have been given 10 percent increase in salaries
- Employees from grad 17 to 20 have been given 5 percent increase in salaries
- No increase in salaries for government employees from grade 21 to 22
- Rs2891 billion has been allocated to pay the interests
- Rs70 billion has been allocated for water reservoirs
- Minimum wage set at Rs17,500
- Ministers agree to voluntary 10 percent cut in salaries
- The National Development Programme will have a total size of Rs1,800bn
- Of this, Rs950bn will be spent by federal
- Rs70bn on dam projects; Rs15bn and 20bn respectively for Bhasha and Mohmand dam land acquisition
- Rs55bn for Dasu hydro power project
- Balochistan development package to get Rs10.4bn and Rs30bn for water projects
- Rs 63.5 billion allocated for special areas including merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmir and Gilgit-Baltistan.
- Rs75 billion have been allocated for equitable Regional Development in order to accelerate development of less developed areas and 22 billion rupees are set aside for 10 year development plan of merged districts.
- Rs128 million have been allocated for conservation and promotion of rich and diverse cultural heritage of Pakistan
- Rs28,646 million have been allocated for Higher Education Commission
- Rs912 billion have been allocated for provincial Annual Development Plans.
- General sales tax on goods will remain unchanged and will stand at 17 percent.
- Food items supplied to bakeries and restaurants will be taxed at 4.5 pc
- Budget deficit to be Rs3,560 billion
- Tax revenue target set at Rs5,822bn
- Non-tax revenue target set at Rs894bn
- Sales tax to be increased on diamond, gold and silver jewellery
- Seven percent Federal Excise Duty would be applicable on vehciles over 2000cc
- Five percent Federal Excise Duty would be applicable on 1000cc vehciles
- 2.5 percent Federal Excise Duty would be applicable on vehciles below 1000cc
- Cement duty has been increased from Rs1.5 to Rs2
- Inflation targets set at between 5 and 7 percent
- 3 percent tax on import of mobile phones to be eliminated
- Textile machinery and parts will be exempt from duties.
- Steel duties will also be reduced to 5pc to help razor exporters
- Medicinal ingredients will be given a 3pc import duty exemption
- Duty on different types of paper to be reduced from 20pc to 16pc
- Minimum taxable income for salaried class to be Rs0.6mn per annum
- Minimum taxable income for salaried class to be Rs0.4mn p.a.
- Non-filers no more restricted from purchasing property
- Federal Excise Duty of Rs5,200 on every 10,000 cigarettes to be imposed
- Property can t be registered in the name of nonfilers.
- Those who will provide jobs to new graduates will be given tax rebates
- Rs1.2mn was legal limit for income tax exemption — it will be reduced to Rs0.6mn for salaried persons and Rs0.4mn for others
- Tax on marble to be increased to 17pc
- Tax on services to be introduced
- Tax on sugary beverages to be increased to 13pc
- Edible oil taxation to Rs40 per kg; FED on it to be increased
- Aviation Division to get Rs 1266.5 million for fiscal year 2019-20
- Rs100 million earmarked for Board of Investment
- Rs 39.986 billion set aside for Cabinet Division
- Climate Change Division to get Rs 7579.2 million
- Rs100 million earmarked for Commerce Division
- Rs 248.3 million fixed for Communication Division (other than NHA)
- Rs24.457 billion for Pakistan Atomic Energy Commission
- Rs 301.47 million for Pakistan Nuclear Regulatory Authority
- Rs 581.812 million set aside for Petroleum Division
- Rs 7,963.517 million for Planning, Development and Reform Division
- Rs 200 million for Poverty Allevation and Social Safety Division
- Rs16 billion for Railways Division
- Rs1000 million for Religious Affairs and Interfaith Harmony Division
- Rs 1,818.23 million for Revenue Division
- Science and Technological Research Division to get Rs 7,407.361 million