In the Budget, for the fiscal year 2020-21 to be announced on June 12; the federal government has decided to increase the defense budget in view of national security. The tax rate on basic food items will be further reduced in the next budget. Tax rates on pharmaceutical items are also likely to be reduced.
As per the details, it will be presented with all the economic targets likely to be set down in view of the ongoing coronavirus also known as COVID-19 pandemic.
The budget for the next financial year will be presented on June 12. It is proposed to increase the volume of the federal budget by 10 percent while the budget priorities have been changed due to the global uncertainty created by COVID-19. Media Reports said that the International Monetary Fund (IMF) and other fund providers are being taken into confidence on the budget targets. Health-related projects are also among the priorities, it has been decided to keep all tone down the targets due to coronavirus. More than Rs 7,500 billion federal budget is likely to be presented in the next financial year. The revenue target is likely to be set at Rs 4,100-4,500 billion. The federal development expenditure is likely to be allocated up to Rs 530 billion.
Moreover according to the recommendations The decision to give special incentives to the construction industry in the federal budget is included. The tax rate on basic food items will be further reduced. Tax rates on pharmaceutical items are also likely to be reduced. The federal government decided to prepare the health budget in consultation with the provinces. Significant increase possible in federal and provincial health budgets. Luxury tax on large houses and farmhouses will be imposed.
More tax will be imposed on Imported luxury items, including large cars and expensive tiles. Possibility of imposing 2% duty on 160 imported items A target of Rs5.1 trillion will be set for the Federal Board of Revenue (FBR), the tax collecting authority for the next year, tax net will be increased to achieve the targets. A proposal of a $26 billion target for exports is under consideration.