The government will present Rs9.5 trillion federal budget for the fiscal year 2022-23 in the National Assembly today with special emphasis on fiscal consolidation to contain budget deficit, reported 24NewsHD TV channel.
Finance Minister Miftah Ismail will present the financial annual plan for the next fiscal in the lower house in the evening. According to the government, the budget has been formulated while considering the existing challenges being faced by the economy at domestic and international fronts.
Yesterday, the government unveiled the economic survey of the outgoing fiscal 2021-22 and informed that the growth rate in the outgoing financial year was 5.97%. But the government termed the rate ‘unsustainable’ saying the country witnessed a higher economic growth during the year, which resulted in the Current Account Deficit (CAD) to soar to a level where the government had no option but to slow down the economy to control the CAD as the country needed to stabilize the economy before moving towards sustainable growth.
In the new financial plan for 2022-23, the volume of the budget is estimated at Rs9.5 trillion with the total federal income estimation at Rs4.7 trillion. The provinces will be awarded Rs4.2 trillion while the budget deficit is estimated at whopping Rs4.8 trillion.
The total expenditures are expected to hover at Rs9.5 trillion. For the debt retirement including both the domestic and foreign borrowings, Rs3.9 trillion will be set aside.
For pension payment, Rs550 billion will be earmarked. Rs1,532 billion will be allocated to defence sector and for grants Rs580 billion have been sanctioned.
To run the government affairs, Rs527 billion are required, whereas under the head of subsidies Rs580 billion have been set aside.
For the federal development budget, Rs800 billion have been earmarked.
The budget has proposed a tax collection target of Rs2.560 trillion under the head of direct taxes while it suggests a target of Rs4.695 trillion under the head of indirect taxes.
The financial managers have suggested a 2.5% federal excise duty on the import of vehicles. The budget proposes to raise the tax ratio for non-filers. A luxury tax will be imposed on big houses and farms houses. There is also a suggestion to levy excise duty on cement.
Additional taxes to the tune of Rs10 billion have been proposed for the real estate sector.
The government is also planning to levy sales tax on fertilizers.
The budget proposes to raise customs duty on edible oil from 2% to 6%.
There is also a proposal to impose 3% corporate tax on firms grossing hefty profits and it has also been suggested to withdraw income tax concessions from them.
PM chairs cabinet meeting on budget proposals
Prime Minister Shehbaz Sharif chaired the special cabinet meeting on Friday summoned to approve next year’s budget.
The meeting discussed and gave approval to the budgetary proposals for fiscal year 2022-23.
The meeting also held discussion on imposition of new taxes, besides approving proposed increase in government employees’ salaries and pensions.
There is an expectation that the government would give a 10% to 15% raise in the salaries of government employees. There is also a proposal to increase convention, medical and other allowances.
Prime Minister Shehbaz has also summoned a government parliamentary party meeting ahead of the budget.