Budget to generate revenue of Rs183 billion in a year: Asad Umer
19 September, 2018
ISLAMABAD: Finance Minister Asad Umar on Tuesday presented Finance Supplementary (Amendment) Bill in National Assembly for the remaining nine months of the fiscal year.
During his speech, he said one of the aims of the government was to generate an additional revenue of Rs183 billion in the year.
He said that the last budget presented by the previous PML-N government was in sharp contrast to ground realities. Consequently, he said, the current government felt the need to present a supplementary budget. Umar announced that contrary to media reports, the government is not burdening existing taxpayers, or people from low-income brackets, and the increase in income tax will only affect the upper income brackets.
Measures proposed for collection of Rs91 billion include increase in tax on non-cash banking transactions by non-filers, increased tax on tobacco, doubling of the Federal Excise Duty on vehicles (1,800 CC and above) and increase in taxes on some luxury items and pricey mobile phone sets. The minister said there would be no reduction in the exemption limit for income tax.
Similarly, the existing tax rate on income slab between Rs1.2 to Rs2.4 million a year would also be retained. However, income tax rate for higher income slabs would be increased.
A flat tax of Rs.1,000 shall be imposed on annual incomes ranging from Rs.0.4 million to Rs.0.8 million, while Rs.2,000 shall be imposed on salaries ranging from Rs.0.8 million to Rs.1.2 million.
Umar said the Government had decided to withdraw tax exemptions for Prime Minister, Ministers and Governors in respect of accommodation, conveyance and sumptuary allowance.
The Finance Minister also announced some relief measures for different segments of the society. He said Petroleum Development Levy worth Rs.100 billion rupees as envisaged in the current budget had been withdrawn for the benefit of the people.
Regulatory duty imposed by the previous government in the budget on 82 tariff lines had been abolished for raw material meant for export related industries. This would involve relief of five billion rupee for the industry.
It has been decided to launch Insaf Health Card scheme in the Federal territory and formerly FATA regions.
The development budget for the current financial year has been proposed to be at Rs725 billion, which has been slashed by Rs.305 billion. The previous government had proposed development budget of Rs.1030 billion.
The Finance Minister, however, made it clear that development budget for CPEC projects and dams would not be reduced, and instead, additional resources would be mobilised for construction of water reservoirs.
The Minister said foreign debts have increased to $95 billion from $60 billion. The minister said that budget deficit stands at 7.1 percent. He also announced a 10 percent increase in pensions.
Regulatory duty on raw material used for export industries would be decreased to zero to benefit export industries by Rs5 billion.
The finance minister began his address with an analysis of the country’s current economic condition. He informed the House that the fiscal deficit in FY2018-19 amounted to 6.6 percent of the GDP, and energy deficit was around Rs.440 billion.
In five years, foreign debt increased by $34 billion while foreign exchange reserves led to depreciation in Pakistani rupee, he added. The minister said that whenever the currency depreciates the price of every imported product rises. He regretted that the gas agreement had also been pegged with dollar, while petrol and edible oils prices also increased sharply, he maintained. Umar said that tax collection was Rs350 billion less in FY18 Budget and that deficit was higher by Rs900 billion from the reality.