Green signal to government economic team to bring 750000 rich people into tax net
Budget 2011-12 with total outlay of around RS 3.7 trillion in the National Assembly on Friday
PM calls for making budget people friendly
ISLAMABAD: Finance Minister Abdul Hafiz Sheikh is to present budget 2011-12 with total outlay of around RS 3.7 trillion in the National Assembly on Friday afternoon. Sources told Pakistan Times that the government employees’ salaries and pension are likely to be increased by 10 to 20 percent in the budget as interim relief again. Approval will also be accorded for setting the target of tax recoveries at Rs 1952 billion besides annual development budget to the tune of Rs 730 billion.
Development budget of federation will stand at Rs 300 billion and Rs 430 billion will be disbursed among the provinces. A sum of Rs 155 billion will be allocated for construction of infrastructure and Rs 122 billion will be earmarked for social sector.
GDP growth target will be fixed at 4.2 percent in the budget for the next financial year starting from July 1. Hundreds of exemptions from the sales tax are to go and consequently a 17 percent sales tax is likely to be slapped on computer software, mineral oil, CNG Kits, ambulances, agro machinery, CNG buses, fertilizers, pesticides, surgical tapes, ultrasound gel, aircraft ships, soft wares and other goods.
Government will continue to provide subsidy of Rs 186 billion to the power sector and agriculture sector would be subsidized with Rs 43 billion. A sum of Rs 18 billion is likely to be allocated for Bhasha dam. Sources told Pakistan Times agriculture growth target is likely to be set at 3.4 percent, GDP growth target 4.2 percent, fiscal deficit target 4.5 percent, industrial development target 3.1 percent while sales tax on electricity is likely to be enhanced from 17 percent to 30 percent.
Exemption in sales tax on import of machinery being used in power generation is likely to be announced in the budget. Duty rate on import of cigarette is likely to be reduced from 20 percent to 5 percent and duty exemption being allowed on life saving drugs, health, education, books, stationery and tuition is likely to stay. Inflation rate is likely to be set at 12 percent. Budgetary allocation for the provinces under NFC award will be made 1.22 trillion.
Moreover President Asif Ali Zardari and Prime Minister Syed Yousuf Raza Gillani have given green signal to government economic team to bring 750000 rich people into tax net. Well placed sources told government economic team led by Finance Minister Abdul Hafiz Sheikh gave detailed briefing to President Asif Ali Zardari and Prime Minister Syed Yousuf Raza Gillani on Thursday about the budget for the fiscal year 2011-12 and the targets set by the government.
Sources told Online FBR had evolved a list in the perspective of tax reforms wherein 750000 rich people had been identified who would be integrated into tax net under tax reforms. President and PM had allowed finance ministry to bring them into tax net. Integration of these persons into tax net would add to the revenue collection to the tune of Rs 75 billion rupees to Rs 100 billion annually.
Moreover PM has directed the government’s economic team that the forthcoming Budget for the financial year 2011-12 should be people friendly to give relief to common man. He asked that appropriate measures be incorporated in the Budget to ensure economic growth thus leading to reduction in inflation, increase in investment and creation of jobs.
Input from Agencies