The budget for the financial year 2022-2021 will be presented in the National Assembly today.
The total volume of the budget for the year 2021-22 is likely to be more than Rs 8,000 billion, which will be presented by the Federal Minister of Finance Shaukat Tarin in the National Assembly.
Will there be an increase in the salaries of government employees or not? The final decision will be taken at a meeting of the federal cabinet before the budget is presented.
It is proposed to increase the salaries of government employees by 10 to 15 per cent.
900 billion is being allocated for the federal development budget and Rs. 1,330 billion for defence.
The target for tax collection in the new financial year will be Rs 5,705 billion, 480 billion in pensions, 530 billion in subsidies, 900 billion in development budget, 510 billion in civil government expenditure and 994 billion in grants.
Direct, Indirect Taxes Will Likely To Rise
The federal budget is scheduled to be announced on June 11, but Revenue Division sources say top tax officials are still discussing key revenue measures.
According to the report, contrary to the claims of the government’s economic team that the forthcoming budget will be tax-free, in fact, the budget is expected to impose a substantial burden of direct and indirect taxes on the common man.
The Federal Board of Revenue (FBR) has been tasked to collect additional revenue of over Rs. 10 trillion in the budget for the current financial year, 2021-22.
This additional revenue will be generated through growth in the economy and inflation, including the elimination of reduction in sales tax, income tax, concessional tax rates.
It is expected that the revenue collection for the current financial year could be around Rs. 47 trillion.
The International Monetary Fund (IMF) is asking Islamabad to propose a revenue collection target of over Rs. 58 trillion for the financial year 2022.
The IMF wants Islamabad to withdraw as many exemptions as possible, rather than relying on revenue collection through administrative measures.
Negotiations with the IMF on revenue are ongoing and an agreement is likely to be reached on most tax issues.
The cabinet meeting, chaired by Prime Minister Imran Khan, will give final approval to revenue proposals that are politically sensitive in some respects.
However, proposals to further reduce customs duties on raw materials, semi-finished products, especially the value-added textile sector, are also on the agenda.
As part of the facility, the government is considering reducing rates from the country’s textile industry, especially textiles.
Similarly, the government may reduce the duty on raw materials for the steel sector, which would be an unprecedented package for the value-added sector.
The three broad pillars on which the budget has been prepared include no new taxes, expansion of the tax base and bringing e-commerce under the tax net.
The Rs 140 billion corporate rebates introduced by the Presidential Ordinance will now be made part of the Finance Bill 2021.
In the case of income tax, there has been strong resistance for salaried and non-salaried persons to make any change in the slab or tax rate. A few other income tax exemptions from the second schedule are also under consideration.
It is proposed to document the sales of 60,000 to 70,000 large retailers under the Point of Sales.
The FBR has also put forward a number of suggestions for documenting debit or credit card payments.
At the same time, measures have been proposed to effectively tax e-commerce as a new sector.
Pakistan has reached an agreement with the IMF that there will be no change in tax rates in areas where inflation is expected to rise.
Under this parameter, the government will not withdraw discounts on food, health and education items in the next budget.