Austerity at top, reformation of tax system haul mark of PTI government first budget

ISLAMABAD: PTI lead coalition government silenced an increasingly critical opposition by resorting to austerity at top with federal  cabinet deciding to receive salaries slashed by 10 per cent. Expressing commitment to reform the taxation system, State Minister for  Revenue Hammad Azhar announced a total outlay of Rupees 8238 billion for fiscal budget 2019-20 coupled with a number of measures for elderly, women and un-employed youth.

The budget outlay belied the rumours of a shrunken budget with record deficit projected by experts to be around 6500 bn as it showed a total increase of 30 per cent over previous years budget. The government choose to entrust the Revenue Minister, an elected member assisted by Advisor Dr Hafeez Shaikh to avoid criticism that budget was presented by a non elected person. The smart move by the government was a surprise for joint opposition which kept protesting during the more than an hour long budget speech by the Revenue Minister Hammad Azhar. Prime Minister Imran Khan was also in attendance. The total budget deficit was estimated to be at Rupees 3560 bn, highest ever but with corrective measures, an economic turn-around was targeted.

Following are the highlights of the annual budget 2019-20 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. Adhoc relief to government servant (BPS 1 to 16) by 10 per cent on running basic salary, BPS 17-20  5 per cent, BPS 21-22- zero per cent Edible Oil, Ghee, Sugar, Bakery items, powdered milk, cheese to be costlier Exemption to salaried sector reduced from 120000 to 60000 and for non salaried class to 400000.

Minimum wages fixed at Rupees 17500 per month. Reduction of  duty on 19 basic raw material used in medicines Increase in FED on cars of 2000 cc and more.

Tough decisions are being taken to meet the government expenditures along with reformation of banking, insurance sector, rescheduling of customs tariff and efforts to make the taxation system transparent and terror free, claimed the State Minister for Revenue hinting at a budget aimed at reformation and economic turnaround.

Tagged , , , , , . Bookmark the permalink.

Comments are closed.