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Saturday, June 02, 2012
Election-year budget aims highBy Sajid Chaudhry
ISLAMABAD: Prepared while keeping in view the election 2013 considerations, the government presented the federal budget 2012-13 with an outlay of Rs 2.960 trillion and deficit of Rs 1.105 trillion in both the houses of parliament on Friday. The budget includes Rs 63 billion new tax burden and Rs 31.77 billion tax and duty relief.
Federal Finance Minister Dr Hafeez Shaikh presented the budget in the National Assembly amid severe rumpus by the Pakistan Muslim League-Nawaz members. Economists believe the government, which is in its last year, has kept in view several considerations while making the budget, which include gaining political support from the government employees, general public, business community, the economists believe.
The overall fiscal deficit has been estimated at Rs 1.105 trillion, which is 4.7% of the GDP as against 5.5% during the outgoing year. Experts are seeing this budget as inflationary, because to meet the deficit the government would resort to borrowing, which would push up inflation.
Rs 183 billion has been earmarked in the budget for the revival of industrial sector and strengthening of power generation sector. The salaries and pensions for government employees have been increased by 20%. This increase in salaries as Ad hoc Relief on running basic pay would cost national kitty Rs 45 billion. The government has allocated Rs 208 billion for subsidy to power and other consumer categories.
It would provide internships and technical training to 100,000 unemployed educated youth to enhance their capacity and help them develop their skills and get jobs. The finance minister said that under the National Internship Programme, 40,000 internships each will be given to the master’s and bachelor’s degree holders in both government and private sector organisations. In addition to this, 20,000 bachelor’s degree holders will be trained in skills that are in demand at home and abroad.
A targeted subsidy on food items will be given by the government to help lower income consumers through the Utility Stores Corporation (USC) stores. Under this scheme, Benazir Income Support Programme (BISP) cardholders will be given a special additional discount of 10% at utility stores on essential food items. To give the poor easy access to this concession, the government plans to establish 2000 new utility stores. The scheme is expected to bring immediate relief to 35 hundred thousand families.
Withholding tax on profits held on Intra-group loans has been abolished, whereas, withholding tax exemption limit of Rs 25,000 on withdrawal of cash from banks in a day is being raised to Rs 50,000. To recognise and incentivise compliant taxpayers, a Taxpayer Honour Card scheme has been proposed in the budget. This scheme will be applicable on all those taxpayers who have filed tax returns and paid due taxes for the last five fiscal years. The holders of the card will be entitled to various privileges and benefits.
The finance minister announced an increase in the income tax exemption limit from the existing Rs 350,000 to Rs 400,000. This relief would also be applicable to businessmen and association of persons. Tax slabs have been reduced to five. Under the new scheme of things, taxpayers will have to pay more tax on that part of the income that is over and above a particular slab.
The total expenditures of the government in 2012-13 have been estimated at Rs 2.960 trillion, which includes Rs 2.396 trillion non-development expenditure and Rs 564 billion development expenditure and net lending. An allocation of Rs 360 billion has been made for the Federal Public Sector Development Programme. Federal tax collection has been set at Rs 2.381 trillion as against the Rs 1.952 trillion in fiscal year 2011-12. The government has decided to increase new taxes burden by Rs 63 billion, whereas Rs 31.77 billion tax and duty relief has been provided to business, trade and industry.
The government has decided to help promote higher education in Balochistan, FATA and Gilgit-Baltistan by paying the tuition fees of all students studying for master’s and PhD degrees in reputable universities of the country. This measure is expected to cost the government Rs 500 million annually.
* More stories :
—Pages A2, B2, B3 and B5
* Salary of employees, pension up by 20%
* New jobs for 100,000 educated youth
* Targeted food subsidy for poor at USC
* Taxpayers will get ‘Honour Card’
* Income tax exemption limit raised to Rs 0.4m
* WHT exemption limit upped to Rs 50,000/day
Courtesy www.dailytimes.com.pk