There are some popular and unpopular aspects of this budget. Though it is mostly said to burden the middle-class through increase in income tax and indirect taxes like GST, WHT etc. but there are still other measures which would help the general populace. Let’s hope the good measures are implemented and the Opposition helps to maneuver the government against unpopular measures and compel to undertake more important measures that is required to overcome our economic challenges.
Here are some key highlights of the budget:
• PSDP Rs1,155bn; up by 35.7pc
• 3G licences to be auctioned in July
• Outstanding amount of $800 million from Etisalat for sale of PTCL to be recovered
• Circular debt to be addressed in 60 days
• Japan to extend support in revival of Circular Railway in Karachi
• Rs57bn for investment on human capital; including higher education and immunisation
• 1,000 colonies for low income groups; each with 500 houses
• Pensions to be increased by 10pc. No raise in salaries.
• Minimum pension raised from Rs 3,000 to Rs 5,000
• Expenditure of PM Office reduced from Rs726m to Rs396m
• Austerity drive to save Rs40bn.
• Increase in indirect taxes as opposed to direct tax, which means more burden on middle-class as opposed to rich.
• GST increased from 16pc to 17pc
• Corporate tax to be reduced in 5 years from 35pc to 30pc
• Pakistan Railways to be converted into a corporation
• Tax slab on salaries up from 25pc on Rs2.5m to 35pc on Rs6.5m
Required More Importantly:
• Bring rich people and large corporations under tax net
• Do away with IMF and other foreign loans gradually, to reduce the burden of interest payment on debts, which is currently whopping 30% of the budget.
• Tax agriculture sector, which accounts for 23% of GDP, largely untaxed.
• Drastically increase spending on education and health sector.
- There are 1.611 million people who frequently embark on international tours but do not pay a single penny as income tax.
- About 584,730 Pakistanis have multiple accounts in domestic and multinational banks, but do not possess NTNs.
- Over 56,000 people live in posh areas and more than 20,000 people own luxury cars, still pay no income tax.
- There are 66,736 individual consumers who pay large utility bills, but no income tax.
- More than 13,000 people have licenses of both prohibited and non-prohibited weapons, but they do not possess an NTN.
- There are 25,130 people who are engaged in lucrative professions like medicine, engineering, law and chartered accountancy, but they do not pay a single penny as income tax.
- Nearly three million people possess a National Tax Number (NTN), but only 1.4 million of them filed income tax returns last year.
I have written another post on Pakistan Budget and the distribution of expenses, specialy the effect of foreign loans (eg from the notorious IMF). You can read here.
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