Tuesday, September 27, 2022
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Imran Khan’s government excludes new general sales taxes

In 2019, Pakistan’s first budget under Imran Khan’s government excludes any new general sales taxes. Pakistan’s 6 trillion rupee budget has a deficit of 3, 56 trillion rupees.

The government of Prime Minister Imran Khan unveiled its first federal budget on Tuesday for the fiscal year 2019–20, dubbed the “budget of the public.”

The day after Imran Khan’s government presented the most recent batch of dire economic data for the cash-strapped nation, showing growth for the current fiscal year plummeting to 3.3%-much below the 6.2% objective-the Rs6 trillion (Dh147.32 billion) budget was unveiled in the National Assembly.

Ministers’ and advisors’ incomes were reduced by 10% in the austerity-focused budget, while the minimum wage was raised.

The budget was presented by Minister of State for Revenue Hammad Azhar amid boos from the opposition benches, and he acknowledged that exports had not increased in the previous five years.

The minister acknowledged that the PTI-led government’s policies have increased remittances by $2 billion and reduced circular debt in the energy sector by Rs 12 billion per month, but no incentives were offered for Pakistanis living abroad.

The opposition benches tore copies of the budget documents as he was speaking and screamed anti-government and anti-Imran Khan chants. Asif Ali Zardari, a former president, and Hamza Sharif, the leader of the PML-N, were among the opposition leaders who were detained before the budget.

In comparison to the revised budget of Rs5.385 trillion for the current fiscal year, the budget of the Imran khan PTI government saw a surge of 30%. According to the minister, overall federal receipts were anticipated to reach Rs 6.717 trillion, up 19% from Rs 5.661 trillion in the prior year. According to him, the Federal Board of Revenue’s (FBR) anticipated revenue collection totaled Rs5.555 trillion, or 12.6% of the country’s GDP (GDP).

According to him, the 7th National Finance Commission (NFC) Award would allocate Rs3.255 trillion, or 32% more than the current year’s share of Rs2.465 trillion, to the provinces from the entire amount of income collected.

According to him, the expected net federal revenues for the forthcoming fiscal year are Rs3.46 trillion, a 13 percent increase over the current fiscal year’s revenues of Rs3.07 trillion.

Similarly, he predicted that the province’s budget surplus would amount to Rs 423 billion for the year, while the federal budget deficit would be Rs 3.56 trillion.

For decades, Pakistan has struggled to collect taxes; according to estimates, only 1% of the nation’s 200 million people submitted returns in 2018.

As Pakistan’s economic problems worsen, the Financial Action Task Force, a money-laundering watchdog located in Paris, may impose sanctions on the nation for failing to stop the financing of terrorism.

According to him, the expected net federal revenues for the forthcoming fiscal year are Rs 3.46 trillion, a 13 percent increase over the current fiscal year’s revenues of Rs 3.07 trillion.

Similarly, he predicted that the province’s budget surplus would amount to Rs 423 billion for the year, while the federal budget deficit would be Rs 3.56 trillion.

For decades, Pakistan has struggled to collect taxes; according to estimates, only 1% of the nation’s 200 million people submitted returns in 2018.

As Pakistan’s economic problems worsen, the Financial Action Task Force, a money-laundering watchdog located in Paris, may impose sanctions on the nation for failing to stop the financing of terrorism.

Former Citigroup Inc. banker and author of The Gathering Storm: Pakistan, Yousuf Nazar stated, “I don’t recall ever seeing any budget set with such a high aim.” The most painful budget in Pakistan’s history would result from this.

Samiullah Tariq, director of research at Karachi-based Arif Habib Ltd., stated that the fiscal space “is projected to undergo severe tightening under a restrictive IMF programme as well as adverse economic conditions.”

 

Bilawal Bhutto Zardari, the chairman of the PPP, responded to the budget by claiming that the federal government was attempting to hide a flood of inflation and rising prices behind a facade of supposed accountability and detentions.

At a joint meeting of opposition parliamentary parties, Bilawal stated, “The issue is not (the arrests of) Nawaz Sharif or Asif Zardari.” The issue is what course the nation is taking Imran khan. “

Speaking to reporters, PML-N leader Khurram Dastagir claimed that Prime Minister Imran Khan lacked the skills necessary to manage inflation.

 Dastagir predicted that the government’s budget would include a “mountain of taxes” and be a “storm” of inflation.

 Dastagir remarked, “We won’t give them the chance to run; we’ll just let them [the government] submit the budget.”

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Imran Khan’s Government Budget Features

  • Spending on the budget is Rs7, 022 billion, up 30% from the previous year.
  • Amount set aside for Public Sector Development Program: Rs. 1,863 billion
  • 3,560 billion rupees will be spent in deficit.
  • The targeted tax income is Rs. 5,822 billion.
  • The targeted FBR tax revenue is Rs. 5,555 billion.
  • The goal for non-tax revenue is Rs894.5 billion.
  • The current budget is Rs6, 192 billion.
  • Set at Rs843.4 billion, development costs
  • Rs701bn is set aside for the Federal PSDP
  • Budgeted for Defense Affairs and Services is Rs. 1,152 billion.
  • To be spent by the civil government will be Rs431bn.
  • Investing 45 billion rupees in higher education
  • The government reserves Rs271 billion for subsidies.
  • Objectives for inflation are between 5% and 7%
  • General sales tax on the merchandise will continue at 17%
  • Elimination of the 3% value added tax on mobile phone imports
  • The recommended FED rate is Rs5, 200 for 10,000 cigarettes.
  • It is proposed to raise the sales tax on sugar to 17%.
  • An Rs. 40 billion subsidy would be provided for gas and electricity
  • The amount allocated for development in tribal districts is Rs152 billion.
  • The development program for Karachi would receive Rs45.5 billion.
  • The BISP scheme’s stipend was raised from Rs. 5,000 to Rs. 5,500.
  • Eventually, the government wants to get rid of circular debt.
  • The government has established a new ministry to combat poverty, which will roll out social safety net measures. The impoverished, orphaned, homeless, and crippled segments of society all gain from the Ehsaas program.
  • Introduction of the ration card system. 80,000 people will receive loans from this program at no interest.

 

Taxes:

  • For the salaried class, the annual minimum taxable income is Rs. 0.6 million.
  • Suggested for the salaried class are 11 progressive tax bands with rates ranging from 5 to 35 percent.
  • For the salaried class, the minimum taxable income is Rs0.4 million per year.
  • For the non-salaried class, eight progressive tax slabs with rates ranging from 5 to 35 percent are planned.
  • No longer prohibited from owning real estate are non-filers
  • Allowing non-filers to buy property costing more than Rs. 5 million
  • For the next two years, the corporate tax rate will continue at 29%.

 

Wages:

  • 10% pay raises for government workers, including those in the military forces, from grade 1 to grade 16.
  • 5% temporary hoc relief for government workers in grades 17 through 20
  • From grade 21 to grade 22, there is no pay raise for civilian government personnel.
  • The minimum pay is Rs. 17,500.
  • Ten percent more was added to pensions.
  • Ministers consent to a voluntary 10% pay reduction
  • The contributions of agencies

 

 

 

 

 

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