News
Friday, June 03, 2011
Rs 3.8 trillion budget 2011-12 today
* General Sales Tax rate to be brought down from 17% to 16%
* Rs 364 billion to be generated through broadening tax base
By Sajid Chaudhry
ISLAMABAD: Federal budget for the fiscal year 2011-12, envisaging growth rate acceleration, economic stabilisation, employment generation, broadening of tax net, would be presented in parliament today (Friday).
With the revision in budget deficit target from 4.5 to 4 percent of the gross domestic product (GDP) in consultations with the International Monetary Fund (IMF) for 2011-12, the outlay of the consolidated budget is being revised accordingly. The total outlay of the budget is likely to be around Rs 3.8 trillion.
Before the budget is unveiled, the federal cabinet in its special session, under the chairmanship of Prime Minister Yousaf Raza Gilani, will approve budgetary estimates and revenue measures for the next fiscal year.
Federal Minister for Finance Dr Hafeez Sheikh would present the budget to the parliamentarians in the evening.
A tax collection target of Rs 1,952 is being set and the government will increase the tax base and coverage of items, especially in the general sales tax (GST) and federal excise duty.
The standard rate of the GST would be brought down from 17 to 16 percent with imposition of tax on all consumer items sold in packing with brand names along with CNG and agriculture machinery, equipments.
Few major GST and income tax exemptions would be withdrawn to generate additional revenues. Sale of natural gas is likely to attract gas levy similar to the petroleum levy in 2011-12.
The federal cabinet would take a final decision on the salary and pension package keeping in view the proposals submitted by the Ministry of Finance. Proposed salary package includes two options, revision in pay scales with an increase in salaries ranging between 5 to 20 percent as option number one. Second option includes 30 to 50 percent ad-hoc relief allowance with no revision in pay scales in the budget, official sources said.
Some 30 percent increase in pension of retired government employees has also been proposed to the cabinet to compensate the pensioners who were not allowed appropriate relief in last year’s budget.
Two increments based on higher qualification are also expected to be restored in the budget keeping in view the brain drain underway in the civil service. The federal government’s employees of grade 1-16 would be getting 100 percent increase in their conveyance allowance in the budget.
The development outlay of the country for 2011-12 would be Rs 730 billion with Rs 300 billion federal PSDP and Rs 430 billion annual development plan for the provinces.
Share of the provinces in federal revenues would be increased from 56 to 57 percent under the 7th NFC Award in 2011-12. The provinces will get around Rs 1.224 trillion share under the NFC Award in 2011-12.
An allocation of Rs 495 billion is being made for the recurrent expenditures of the three armed forces of the country for the next fiscal year, Rs 786 billion would be earmarked for debt servicing, Rs 118 billion for payment of pension to retired government employees while Rs 200 billion would be spent on subsidising goods and services.
Prime Minister Yousaf Raza Gilani on Thursday directed the government’s economic team that the forthcoming budget should be people-friendly to give relief to common man.
He asked that appropriate measures be incorporated in the budget to ensure economic growth thus leading to reduction in inflation, increase in investment and creation of jobs.
Courtesy www.dailytimes.com.pk