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Govt presents budget, imposes new taxes

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ISLAMABAD: Minister of State for Revenue Hammad Azhar presented the country’s Federal Budget 2018-19 in the National Assembly on Tuesday.

He started off by shedding light on the gloomy economic situation of the country before the Pakistan Tehreek-e-Insaf’s regime. He mentioned that Pakistan’s total debt had reached Rs31 trillion owing to high-interest loans taken by the previous government.

Moreover, he mentioned that the foreign exchange reserves had dropped below $10 billion, current account deficit (CAD) had reached $20 billion, whereas the trade deficit had reached $32 billion.

“Pakistan received a bailout package from International Monetary Fund (IMF), along with financial assistance worth $6 billion from Saudi Arabia in the form of deferred oil payments to alleviate the burden on foreign exchange reserves,” he maintained.

Salient Features 

  • CAD will be reduced to 6.5pc in the upcoming fiscal year of FY19-20.
  • Exports will be enhanced via a revised duty structure.
  • Power and gas rates will be lowered and free trade agreements will be re-evaluated.
  • Pakistani will be made a part of the international value chain.
  • Defence budget will remain the same i.e. Rs1.15 trillion.
  • Four key policies will be introduced with regard to social welfare programmes.
  • Rs200 billion will be allocated to provide power to consumers belonging to low-income slabs at subsidized rates.
  • Around one million people shall be provided ration cards under the Ehsas programme.
  • The government’s running expenses will be reduced from Rs460 billion to Rs437 billion.
  • Rs110 billion will be allocated to provide Rs5,000 as income support to nearly 5.7 million households every month under the Benazir Income Support Programme (BISP).
  • Federal Board of Revenue’s first and foremost priority would be to increase tax revenue in the upcoming fiscal year to nearly Rs5,500 billion.
  • Approval and implementation of Treasury Single Account (TSA).
  • Budget size would be 30pc higher i.e. Rs7.022 trillion.
  • Fiscal deficit would be 7.1pc of GDP i.e. Rs3.13 trillion, while overall fiscal deficit would be Rs3.56 trillion.
  • Tax to GDP ratio targeted at 12.6pc

Development Allocations

  • The National Development Programme will be allocated Rs1,800 billion.
  • Rs55 billion will be spent on Dasu hydropower project.
  • Rs24 billion will be allocated to Havelian Thakot motorway.
  • Construction of the Samrial-Kharian Motorway shall be commenced.
  • Rs60 billion will be allocated for human development.
  • Rs45 billion will be spent on higher education.
  • Rs1.2 trillion will be provided for agriculture.
  • Rs45.5 billion will be earmarked for nine projects in Karachi.
  • Rs10.4 billion and Rs30 billion will be provided for water projects under the Balochistan development package.

Minimum Wages

  • The minimum wage will be increased to Rs17,500
  • Federal government employees from Grade 1-16 shall be given a 10pc pay raise, whereas employees from Grade 17-20 shall be given a 5pc pay rise, while no increment for Grade-21 and above.
  • Salaries of cabinet members will be slashed by 10pc.

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