News
June 09 , 2023
Rs 6 Trillion Deficit Budget to Be Unveiled on Friday
Islamabad: A draft of the federal budget with over Rs6 trillion deficit has been prepared that will be presented at a cabinet meeting on Friday for its approval and later in the day in the parliament.
It carries a proposal for imposing new taxes worth Rs700 billion. The total outlay of the budget is expected to be Rs14.5 trillion. The government employees are likely to receive a boost of 30% in their ad hoc relief allowances. The pensioners will get a 20% hike in pensions.
It has also been suggested that the medical and conveyance allowance of government employees should be increased by 100%. The fiscal deficit target has been set at 7.7% of the GDP.
A revenue collection target of Rs9.2 trillion has been set. The Federal Board of Revenue (FBR) will be assigned the target of generating revenue aggregating Rs2.8 trillion, 55% of which will be transferred to the provinces.
The federal government plans to spend a sum of Rs950 billion on development. An amount of Rs200 billion will be spent on launching new projects under the public-private partnership mode.
The total provincial development budget of Rs1.55 trillion is also proposed to be allocated.
A sum of Rs1.8 trillion has been proposed for defense.
Besides, the FBR will be expected to collect an additional amount of Rs1.9 trillion in the upcoming fiscal year.
According to sources, new taxes will be imposed on the property sector and company profits. The rate of levy on petroleum products is likely to be increased further. A standard rate of 18% sales tax will be imposed in the budget.
Sales tax of 25% will be charged on luxury items. It is proposed to increase the rate of duty on imported vehicles with a capacity greater than 1,000cc. It has been decided to tax more than 30% on mutual funds and real investment trusts for non-filers.
It is also proposed to increase the withholding tax on imported luxury goods. It has been decided to double the withholding tax for non-filers engaged in property sector transactions.
Three proposals related to salaries and pensions of government employees are under consideration in the budget.
A 100% increase in medical and conveyance allowances of government employees has been suggested.
Besides, a 10% increase in their salaries as ad hoc allowance has been proposed.
It has been suggested to increase the pensions by 10%. It has also been proposed to increase the medical allowance of pensioners by 100%.
The second proposal is to increase the salaries of all government employees from Grade-one to Grade-22 by 25% apart from hiking their medical and conveyance allowances.
The medical allowance of the pensioners should be increased too. Apart from that, the pensions should be boosted upwards by 15%.
According to the third proposal, a 30% increase should be made in the salaries of the employees from Grade-one to Grade-16.
The salaries of officers of Grade-17 and above should be raised by 20%.
The medical and conveyance allowances of the employees should be increased by up to 50%.
The pensions should be increased by 20%. Besides, the medical allowance of the pensioners should be raised as well.
There are also proposals to increase the Employees Old-Age Benefits Institution (EOBI) pensions and minimum wages.
(With input from agencies. – The Express Tribune)