Hammad Azhar presents Federal Budget 2019-2020
Hammad Azhar presents Federal Budget 2019-2020
ISLAMABAD (92 News) – Minister of State for Revenue Hammad Azhar presented the Federal Budget 2019-20 in the National Assembly on Tuesday. In his budget speech, he started off by shedding light on the gloomy economic situation of the country before the Pakistan Tehreek-e-Insaf’s regime. He mentioned that Pakistan’s total debt had reached Rs31 trillion owing to high-interest loans taken by the previous government. Moreover, he mentioned that the foreign exchange reserves had dropped below $10 billion, current account deficit (CAD) had reached $20 billion, whereas the trade deficit had reached $32 billion. “Pakistan received a bailout package from International Monetary Fund (IMF), along with financial assistance worth $6 billion from Saudi Arabia in the form of deferred oil payments to alleviate the burden on foreign exchange reserves,” he maintained. “There has been no increase in exports in the past five years,” he said. “Due to financial mismanagement, the deficit reached Rs2260bn. Circular debt in the energy sector reached Rs1200bn.” The minister said measures taken by the PTI-led government have resulted in remittances rising by $2bn, and Rs12bn decrease per month in circular debt in the energy sector. Azhar added that the 11 per cent tax to GDP ratio currently, was the lowest in the region. There were only 50 per cent of SECP registered companies paying tax. "We will have to change this culture." Hammad Azhar has delineated the key points for Budget 2020, saying the government's key priorities were public welfare and well being and reducing the external deficit.
Federal excise duty on carsThe minister for revenue says that the budget recommends that cars of upto 1000 CC see a federal excise duty of 2.5 per cent. It is further recommended that cars which are more than 2000CC in capacity see a federal excise duty of 7.5pc imposed.
Increasing taxes our fundamental priority
The minister has said that the government's priority for the next fiscal year is to increase the tax revenue, with the target set at Rs5,500bn by the Federal Board of Revenue (FBR). "We will increase our tax net...benami and non registered assets will be brought into the net," he said. He said that the tax refund system will be improved.
Sugar tax advised to be increased to 17pcSugar prices are likely to go up as it has been recommended that the sales tax, which previously stood at 8.5 per cent, now be increased to 17 per cent. Sugary drinks will also see an increased tax duty of 13.2 pc versus the previous figure of 11.25 pc.
GST to remain unchanged at 17pcThe minister for revenue has announced that the general sales tax on goods will remain unchanged and will stand at 17 per cent for FY2019-20. Food items supplied to bakeries and restaurants will be taxed at 4.5 pc.
Duties will be reduced to boost non-traditional exports
- To boost non-traditional exports like wooden furniture, duties will be reduced
- To save Pakistan's forests while safeguarding the furniture industry, duty on imported wood will be reduced from 100pc to 3pc
- Steel duties will also be reduced to 5pc to help razor exporters
- Duties will also be reduced on several domestic goods, printing and solar panels and chemical industry
- Hydrocracker plant machinery to also be exempted from duty
- Medicinal ingredients will be given a 3pc import duty exemption
- Textile machinery and parts will be exempt from duties
- Textile machinery and parts will be exempt from duties. Duty will also be lowered on flexible fibers and non-woven materials
- Paper scrap and pulp will be exempted from custom duty as paper is an important input in the educational sector
- On different types of paper, duty to be reduced from 20pc to 16pc
- This will bring down prices of paper and books, and printing presses will get a boost
Headline figures for Budget 2020
- Budget outlay to be Rs7,022bn — 30pc higher than last year
- Federal revenues to be Rs6,717bn — 19pc higher than last year
- FBR tax target set at Rs5,550bn
- Tax to GDP ratio to be increased to 12.6pc
- Rs3,255bn to be disbursed to provinces via the 7th NFC award — 32pc higher than last year
- Net federal reserves to touch Rs3,462bn, 13pc higher than last year
- Budget Deficit — Rs3,560bn
- Provincial surplus budgeted at Rs423bn
- Total fiscal deficit to clock in at Rs3,137bn — 7.1pc of GDP, compared to 7.2pc of GDP last year
- Privatisation of LNG plants to generate $2bn; another $1bn from auction of mobile licenses
- Campaign to recover Rs80bn in outstanding dues completed successfully over last 6 months; load-shedding reduced from upto 80pc of all meters. Monthly shortfall to be reduced to Rs24bn.
- Rs152bn to be provided to Fata as part of a 10-year project totaling Rs1tr
- Strategy being devised to counter money laundering
- All cabinet members, including prime minister, have agreed to a 10pc cut in salary.
- Salaries for grades 1 to 16 will be increased 10pc, while salaries for grades 17 to 20 will be increased by 5pc for next fiscal year; no increase in salaries of grade 21, 22 employees
- Housing project will provide jobs. Land has been arranged in some cities, while funds are being arranged for others.
- Rs100bn have been set aside for the 'Sasta Karobar' scheme
- Rs40bn have been set aside for subsidies for electricity, agricultural development
- A 5-year programme is being developed with the support of provinces
- Rs9.3bn have been earmarked for fish farming
- Electricity to tubewells will be provided at Rs6.85 per unit
Development budget: key features
"Our institutions will be strengthened and 2019-20 will be the year of change. The govt will avoid taking loans from the SBP to cover shortfalls, while inflation will be targeted to be kept between 5-7pc," he said.
- The National Development Programme will have a total size of Rs1,800bn
- Of this, Rs950bn will be spent by federal
- Rs70bn on dam projects; Rs15bn and 20bn respectively for Bhasha and Mohmand dam land acquisition
- Rs55bn for Dasu hydro power project
- Rs24bn have been earmarked for Havelian Thakot motorway
- Samrial Kharian motorway to also be constructed
- Govt has earmarked Rs60bn for human development
- Higher education will receive Rs45bn
- Agriculture will receive Rs1.2tr in the federal development budget
- Rs45.5bn have been set aside for nine projects in Karachi
- Balochistan development package to get Rs10.4bn and Rs30bn for water projects
- 10 per cent increase in salaries for government employees from grade 1 to 16, including armed forces employees
- 5 per cent ad hoc relief for government employees from grade 17 to 20
- No increase in salaries for civilian government employees from grade 21 to 22
- Minimum wage set at Rs17,500
- Pensions increased by 10 per cent
- Ministers agree to voluntary 10 per cent cut in salaries
Non-filer can buy property
- Lifted the ban on non-filers to buy properties
- Non-filers able to buy property worth Rs5 million or more
- Minimum taxable income for salaried class to be Rs0.6mn per annum
- Minimum taxable income for salaried class to be Rs0.4mn p.a.
- Non-filers no more restricted from purchasing property
- Non-filers to be allowed to purchase property of over Rs5mn
TAXES:Tax on services to be introduced Tax on marble to be increased to 17pc Tax on services to be introduced Tax on sugary beverages to be increased to 13pc Edible oil taxation to Rs40 per kg; FED on it to be increased 17pc sales tax on ghee, oil etc Rs2 per kg on cement
- FED not only on 1700c and above, but 2.5pc upto 1000cc, 7.5 on more than 2000cc
- Rs5,200 tax per one thousand cig sticks, Rs117bn target of revenue from this measure
- Suppliers of meat, vegetables, and wheat, used in the making of food, usually resort to tax evasion
- To discourage them from doing so, tax on material supplied to restaurants and bakeries is being reduced from 17% to 7.5%
Tax rates for powdered milk
- There are different tax rates for powdered milk
- It is being proposed to have a 10% uniform tax on items such as powdered milk, non-flavored milk and cream
Refund bonds:FBR will settle tax refunds by issuing promissory notes Active tax payer list issue will be resolved Taxation on CNG to be increased Cotton etc will be slapped with 10pc tax Sugar now taxed at 8pc and Rs18bn revenue is obtained from it, it is advised to increase to 17pc
Cottage industry:New definition is advised to include only those industries earning less than Rs2 million turnover per annum Opposition members tear budget copies Mayhem in the parliament continues despite National Assembly Speaker Asad Qaiser's instructions for opposition members — who have gathered around the speaker's dais — to return to their benches. Some members of the opposition have torn copies of the budget.
Opposition raises ruckus in NADuring the budget presentation, members of the opposition protested in front of the NA speaker’s dais. Opposition members chanted slogans against the government and Prime Minister Imran Khan. Opp protests for not being provided with budget speech copies Opposition members protested for not being provided with copies of the budget speech which were distributed later.
If budget is anti-people, we will protest: Sherry RehmanPPP leader Sherry Rehman has said that the opposition will attend the National Assembly budget session. “If the budget is people-friendly, we will listen to it. If it is anti-people, we will protest,” she said.
PM Imran in NA
PML-N leaders arrive in NA wearing black armbandsOpposition Leader in National Assembly Shehbaz Sharif, PML-N parliamentary leader in the National Assembly Khawaja Asif along with some other party members wearing black armbands arrive in the parliament as Hammad Azhar addresses the House.
PPP Chairman Bilawal Bhutto Zardari arrives
PPP Chairperson Bilawal Bhutto Zardari has arrived in the National Assembly.