Fiscal budget for the year 2019-20 announced
- By Web Desk -
- Jun 11, 2019
ISLAMABAD: Pakistan Tehreek-e-Insaf led coalition government presented its first federal budget for the fiscal year 2019-2020 in the National Assembly of Pakistan on Tuesday, ARY News reported.
Minister of State for Revenue Hammad Azhar presented the budget from the floor of National Assembly and apprised the lawmakers and the nation regarding budgetary allocations for the financial year.
Budget In Brief
The minister was constantly dealing with a chaotic opposition who were chanting and sloganeering throughout the proceedings which added to the difficulty of the important announcement, many members of the opposition encircled Azhar’s dias and protested on his ongoing budget speech.
Budget Review 2019-20 (Salient Features)
- The resource availability during 2019-20 has been estimated at Rs 7,899.1 billion against Rs 4,917.2 billion in the budget estimates of 2018-19.
- The provincial share in federal taxes is estimated at Rs 3,254.5 billion during 2019-20, which is 25.7% higher than the budget estimates for 2018-19.
- The expenditure on General Public Services is estimated at Rs 5,607.0 billion, which is 76.9% of the current expenditure.
- The overall expenditure during 2019-20 has been estimated at Rs 8,238.1 billion, out of which the current expenditure is Rs 7,288.1 billion.
- The net capital receipts for 2019-20 have been estimated at Rs 831.7 billion against the budget estimates of Rs 443.1 billion in 2018-19 reflecting an increase of 87.7%.
- The total outlay of budget 2019-20 is Rs 8,238.1 billion. This size is 38.9% higher than the size of budget estimates 2018-19.
- The net revenue receipts for 2019-20 have been estimated at Rs 3,462.1 billion indicating an increase of 12.8% over the budget estimates of 2018-19.
- The external receipts in 2019-20 are estimated at Rs 3,032.3 billion. This shows an increase of 171.2% over the budget estimates for 2018-19.
- The development expenditure outside PSDP has been estimated at Rs 85.8 billion in the budget 2019-20.
- The size of Public Sector Development Programme (PSDP) for 2019-20 is Rs 1,613 billion. Out of this, Rs 912 billion has been allocated to provinces. Federal PSDP has been estimated at Rs 701 billion, out of which Rs 348.2 billion for Federal Ministries/Divisions, Rs 348.2 billion for Corporations, Rs 5 billion for Earthquake Reconstruction and Rehabilitation Authority (ERRA), Rs 17 billion for Relief and Rehabilitation of IDPs, Rs 53 billion for Security Enhancement, Rs 5 billion for Prime Minister’s Youth Skill Development Initiative, Rs 2 billion for Clean Green Pakistan Movement/Tourism, Rs 1 billion for Gas Infrastructure Development Cess, Rs 48 billion for Merged Areas of FATA 10 Years Development Plan and Rs 24 billion for Pakistan Sustainable Development Goals (SDGs) and Community Development Programme.
- To meet expenditure, bank borrowing has been estimated for 2019-20 at Rs 339 billion, which is lower by 688.7 billion than the revised estimates 2018-19 reflecting decrease at 75%.
The minister addressing the seat of the speaker said that, “Billion Tree Tsunami and Clean and Green Pakistan initiatives launched, FATA and merged areas were put under special concentration and brought into the national streamline.”
Lauding the efforts of the Prime Minister and the Army Chief, Azhar said, “I pay my respects to the Army Chief and the Chief of Armed Staff Qamar Javed Bajwa for their exemplary role in trying to curb the menace of economic instability.”
The minister told the NA that resource availability during the fiscal year has been estimated at Rs7899.1 billion against Rs4917.2 billion in the budget estimates of the outgoing fiscal year.
The gross revenue receipts are estimated at Rs6717 billion, showing an increase of 18.7 percent over the budget estimates of outgoing fiscal year.
After the share of provinces in gross revenue is transferred, the net review of federal government has been estimated to be about Rs3463 billion for the next fiscal year.
The provincial share in federal taxes is estimated at Rs3254.5 billion during the next fiscal year, which is 25.7 percent higher than the budget estimates for the outgoing year.
The tax revenue for the next fiscal year is estimated at Rs5822,160 million, which reflects an increase of 33 percent over revised estimates of the current fiscal year.
Out of this, the FBR collection target is Rs5550 billion which will be 12 percent of the GDP.
Annual Budget Statement
IMPORTANT POINTS
- The government has instituted a new initiative to help the needy and impoverished, ‘Ehsas Program’ and ‘Sehat Insaf’ cards are initiatives that will lessen the burden on the less fortunate.”
- ‘Rashan Card’ scheme has been introduced in the budget which will make the card holders eligible for ration around the year.
- Funds have been released for the completion of development projects and more funds have been allocated to start new development projects all over Pakistan.
- The ‘Ehsaas program’ has been increased from RS5000 to Rs5500.”
- The amount for children stipend has been increased from Rs750 to Rs1000 under the Prime Minister’s Youth Affairs initiative.
- Rs20 billion have been allocated for the land of Diamer Dam.”
- Rs80 billion have been suggested for the Energy sector and will be allocated soon enough.”
- Rs 43 billion has been fixed for the higher education.”
- Prime Minister Imran Khan has given approval to the Rs100 billion worth ‘Kamyab Jawan Program’.
- Foreign investors have been taken on board to look into the detrimental state of the Pakistan Steel Mills, Azhar elaborated.
- We will be getting Rs.1 billion from mobile card taxation, revealed Azhar.
- An increase of 2.5pc tax imposed on 1000CC cars.”
- Money laundering is a black mark opined Azhar and the country suffers internationally and nationally due to it, we are taking strict measures to the put a stop to the practice, new system will be launched to counter money laundering, said Azhar.
- Minimum wage will be increased to Rs. 17500.”
- Parliamentary officials of the government taking to their leader, the Prime Minister have agreed to 10 percent deduction in their monthly incomes, announced Azhar.
- 10pc increase in the salaries of grade 1 to 10 employees have been agreed upon in the fiscal year budget of 2019-20, whereas no increase is being made in the salaries for Grade 21 and 22 employees.”
- Rs55 billion has been allocated for Daso Hydro Power project.
The asset declaration scheme has been set in motion so that undisclosed and unnamed properties can be brought into the tax net it was revealed during the speech, The scheme can also be used for properties and benami accounts. The money kept abroad could be turned white by paying 4 per cent tax.
- Rs 156 billion has been allocated for National Highway Authority,” detailed Azhar.
- Rs 950 billion has been allocated for federal development projects.”
- 5pc increase in salaries of grade 17-20 employees has been approved.”
- 5pc custom duty has been imposed on the LNG
- 10pc tax imposed on cream and flavored milk
- Federal Excise Duty (FED) on mineral water has been increased from 11pc to 14pc
- FED on soft drinks has been increased from 11.25 to 13pc
- it is suggested to reduce electricity tariff to marble industry by Rs1.25 per unit
- Stipend amount for girls being increased to Rs1000 from precious Rs750.
- Gold, Silver and Diamond along with other precious gems to be taxed
- 29% tax rate to be withheld on companies for 2 years
- Institutes facilitating fresh graduates to be provided with tax relief
Azhar said that a rapid increase was witnessed in revenue due import and announced to end import duty on over 1600 items.
“Government finalizing reforms project in customs tariff , taking measures to curb import of cloth.”
“Duty on wooden furniture has been decreased,” entailed Azhar.
- Sales tax on sugar increased from 8 percent to 17 percent
- Sales tax increased to 17 per cent on leather products
- The sales tax ratio on restaurants and bakers has been decreased from 17pc to 7pc
- Mobile phone tax reduced by 3pc
- General Sales Tax to remain unchanged at 17pc
- 17 per cent federal excise duty imposed on edible oil and ghee
- Condition of non filers not being eligible to buy properties exceeding 5 million Rupees abolished.
- The government has lifted the ban for non-filers on the purchase of properties worth Rs500,000
- 17 per cent FED imposed on steel sector
- Allocates Rs 17 bn for rehabilitation, assistance of IDPs
- Issuing bonds proposed for tax refund
- Tax credit on purchasing machinery will to end within two years
- 15 per cent withholding tax will be imposed in connection with royalty
- Rs.1.15 trillion have been set aside for Defence budget
- Federal Board of Revenue has introduced valuation for properties along with recommendations to impose withholding tax on properties
- Federal excise duty of Rs 5,200 has been recommended on every 10,000 cigarettes.
The Minister added that the government is dealing with tremendous economic turmoil, although the burden is the wrongdoing of past governments.
In closing Azhar added that the government will strive to steer the economic ship to stability with the help of the nation and by following the vision of Quaid-e-Azam Muhammad Ali Jinnah, the founder of Pakistan.
“Prime Minister Imran Khan had directed his economic team in an earlier meeting to ensure minimum burden on the poor segment of the society.”
He also urged the officials to prepare a people-friendly budget, which also ensures the economic stability of the country.
The Prime Minister of Pakistan is also scheduled to address the nation at 9 p.m Pakistan Standard Time today, informed Special Assistant to the Prime Minister of Pakistan Naeem Ul Haque.
After the whirlwind speech Azhar talked about the budget and said that the anti-corruption campaign had increased manifold in the past days and he could see that the opposition was feeling the pressure.
“We did not award a National Reconciliation Ordinance (NRO) deal to the opposition this time around and they are certainly distraught about the fact, the business of the state will go on as normal,” iterated Azhar.
Azhar expressed that the economy was headed in the right direction.
Read More: Full text of Budget 2019-20 speech
It is worth recalling that Pakistan’s armed forces have decided to not to receive an increased share under defence budget as a ‘voluntary initiative’.
PTI’s mini-budget:
On Jan 23, former finance minister Asad Umar announced the government’s second mini-budget, which largely focuses on revenue-based measures to improve supply-side conditions for businesses and incentivise domestic reinvestment.
After unveiling the budget, Umar had said that the Supplementary Finance Bill (Second Amendment) 2019 also known as the government’s mini-budget was, in reality, ‘economic reforms bill’, which was aimed at promoting investment and giving support to the national economy.
PML-N’s Budget 2018-19:
In April last year, the former government of Pakistan Muslim League Nawaz (PML-N) presented the federal budget for the fiscal year 2018-19 with a total outlay of Rs 5.9 trillion.
The tax revenue target was Rs4.435 trillion while the GDP growth rate target was fixed at 6.2 per cent. Rs1.1 trillion was apportioned for defence sector.
Among other salient features of the previous federal budget, Rs688 million rupees were allocated for alleviation of poverty and the federal expenditure was set at Rs1010 billion whereas the provincial at Rs1030 billion.