• Federal budget with outlay of Rs9.5tr presented
• Govt employees’ salaries up 15pc, no tax on those earning up to Rs100,000/month
• Subsidies on sugar, wheat flour proposed
• Taxes on cars over 1,600cc to be increased
• Pensioner tax reduced to 5pc from 10pc
• Advance withholding tax to be collected from those sending remittances abroad
• Tax on banking sector increases to 42pc
• Families with income below Rs40,000 to be given Rs2,000
• Households using fewer than 200 units of electricity to be offered loans on easy instalments to buy solar panels
• Tax-to-GDP ratio set at 9.2pc
• Rs699bn on targeted subsidies in new fiscal
• Defence expenditure at Rs1.52tr
• FBR target set at Rs7tr
• 2pc additional tax for those with Rs30m annual income
• Average inflation forecast at 11.5pc
ISLAMABAD: Amid ongoing negotiations to convince the International Monetary Fund (IMF) to release bailout payments, the PML-N-led coalition government on Friday presented a federal budget with a mix of real stabilisation measures sugar-coated with feel-good sentiment — the revival of petroleum levy with a bang, withdrawal of incentives for construction coupled with taxation on real estate and candies for government employees, income tax payers, industries and solar energy — and additional taxes of Rs355 billion to be collected by the Federal Board of Revenue (FBR).
“Economic stability is our foremost priority … we have to set strong foundations of economic development that is based on sustainable growth,” said Finance Minister Miftah Ismail while presenting the next year’s budget in the National Assembly, adding that economic development would be derived through from exports, particularly of agriculture, information technology and industrial products.
The most critical moves coming out of the IMF programme in the budget relate to an almost negligible change in subsidies (Rs699bn next year against Rs682bn in the current year) and a reduction in power sector subsidies.
