General

Miftah Ismail unveils budget for FY2018-19

Minister for Finance Miftah Ismail presented budgetary proposals at the National Assembly today (Friday).
The federal gross revenue receipts are estimated at 5661 billion rupees as compared to 4992 billion rupees in the outgoing year.
This includes FBR s tax estimates of 4435 billion rupees as against revised estimates of 3935 billion rupees for the current financial year.
Out of the total revenues, the provincial governments share is estimated to 2590 billion rupees as compared to 2316 billion rupees revised estimates for the current financial year.
After transfer to the provincial governments, the net revenue of the federal government is estimated at 3070 billion rupees for the next year as compared to revised estimates of 2676 billion rupees in the current financial year.
The interest payments for next year have been budgeted at 1620 billion rupees against the revised target of 1526 billion rupees for the outgoing year.
The defense budget is proposed at 1100 billion rupees against the revised budget of 999 billion rupees in the outgoing year.
Budget deficit will be four point nine percent of the GDP as opposed to five point five percent of GDP of revised budget estimates in the outgoing year.
The Finance Minister announced ten percent adhoc relief allowance to the civil and armed forces employees and ten percent increase in pensions across the board.
House rent ceiling and house rent allowance have also been increased by fifty percent each.
Minimuum pension is being increased from the existing six thousand to ten thousand rupees considering the difficulties of low paid pensioners.
Similarly, family pension would also get increase from 4500 rupees to 7500 rupees.
Minimum pension of pensioners above seventy five years of age would be fifteen thousand rupees.
The government has also proposed an allocation of twelve billion rupees for provision of advances to government servants for house building and purchase of transport facility.
It has also set aside five billion rupees for senior officers performance allowance, details of which would be announced separately.
Over time allowance of staff car drivers and dispatch riders is being increased from forty rupee per hour to eighty rupee per hour.
The finance minister said the financial impact of these proposals will be sixty nine billion rupees.
Miftah Ismail said despite many difficulties and challenges, the government achieved economic stability over the last five years and took the growth rate to the record level.
Highlighting the economic performance of incumbent government, the Finance Minister said GDP ratio remained five point eight percent during the current fiscal year which is the highest in the last thirteen years.
He said volume of economy over the last five years has increased to thirty four thousand, three hundred and ninety six billion rupees.
Finance Minister said per capita income has increased to over one hundred and eighty thousand rupees. Today, the country has become the twenty fourth biggest economy.
He said the agriculture sector grew by three point eight percent, industrial sector by five point eight percent, services six point four percent during the current fiscal year.
Miftah Ismail said government also controlled the inflation rate to three point eight percent. The food inflation remained two percent.
Finance Minister said budgetary allocations for Benazir Income Support Program for the next financial year have been increased to 124.7 billion rupees as against 121 billion rupees in the outgoing year.
The Minister said government has launched a national poverty graduation program for BISP beneficiaries with more than nine point five billion rupees.
Under this program beneficiaries willing to start their own businesses will be provided with a one-time cash grant of fifty thousand rupees to start their own business.
Miftah Ismail said that 688 million rupees are being allocated for Pakistan Poverty Alleviation Fund.
He said the scheme launched by PML (N) government in 1991 to pay the loans of widow borrowers from house building finance corporation up to the value of 3.5 lac rupees would continue next year with an increased limit of six hundred thousand rupees.
Miftah Ismail also announced several relief measures for agriculture, daily and poultry sectors.
These include withdrawal of three percent custom duty on import of bulls meant for breeding purposes.
Concessionary rate of customs duty on the import of feeds meant for livestock sector is being reduced from ten percent to five percent and fans meant for use in dairy farms be allowed a concessionary rate of three percent to members of corporate dairy association.
This will substantially reduce their cost of inputs and boost further expansion in respect of poultry sector.
The government announced that the rate of customs duty of eleven percent on corrective eyesight glasses would be reduced to three percent.
The Finance Minister announced that enabling provisions are proposed to be incorporated in the income tax ordinance to implement property transactions.
Under the proposals, property transactions will be recorded on the value declared by the buyer and the seller and FBR notified rates are proposed to be abolished.
At the federal level, one percent adjustable advance tax from the purchaser on the declared value is proposed to replace the existing withholding tax on sellers and purchasers.
It is proposed that the non-filers may not be permitted to purchase property having declared value exceeding four million rupees.
The provinces have been asked to abolish the provincial rates for the collection of stamp duty and to collect a total of one percent tax under stamp duty and capital value tax on the value declared by the buyer and the seller.
To discourage under declaration, the FBR may hold a right to purchase any property within six months of registration by paying a certain amount over and above the declared value which may be hundred percent in the next fiscal year, seventy five percent in the following year and fifty percent in the subsequent year.
Some other salient feature are:
1- Individuals income exempted up to Rs 1.2 million.
2- Tax on individual income from Rs 1.2 million and above will be taxed as per slab which has been decreased.
3- Data mining introduced for new tax payers search.
4- Remittance up to $100,000 exempt, above this will be investigated.
5- Immoveable assets undeclared the government within six months can purchase by double price to the declarant if not proper.
6- FBR rate for property valuation abolished.
7- Filer tax rate 1% against property sale and purchase.
8- Gst exemptions same as per last year.
9- 5 Sectors under sro 1125 at 0 rated
10- Exports refund will be paid within 12 months 1/7/2018
11- Corporate tax decreased to 25% upto 2023
12- Real state investors tax reduced to 7.5%
13- Non Filer bank transactions tax rate reduced to 0.4%
14- Tax audit only once in three year
15- Super Tax to be decrease by 1% each year to end it up.
16- AOP slab decrease to 30%
17- Undistributed profit decrease to 5%
18- Tax on bonus shares abolished
19- Dividend tax decrease to 5%
20- Now with holding on services would be above rs. 30000/- and on supplies above Rs. 75000/
21-Rs 25 billion set aside for education