Here is outlay of budget for 2009-10. One thing that if found interesting is how much money it costs Pakistan for debt servicing-724 billions rupees out of 2.9 trillion total federal budget, and we have to borrow more money to pay off old debt. I’m sticking this thread as more information comes during up coming budget session of the parliament.
Federal cabinet approves 2009-10 budget proposals
Federal cabinet approves 2009-10 budget proposals
Updated at: 1535 PST, Saturday, June 13, 2009
ISLAMABAD: The federal cabinet has approved the upcoming budget proposals on Saturday.
The cabinet met with Prime Minister Syed Yousuf Raza Gilani in chair to review and finalize the suggestions of upcoming budget for fiscal year 2009-10.
The government is set to unveil the consolidated budget with an outlay of over Rs2.9 trillion based on uncertain external flows.
The proposed budget has an allocation of Rs 724 billion for debt servicing, funds for which will be financed through local and external borrowing.
Non-development expenditures are estimated at Rs 1.55 trillion, Rs 621 billion have been apportioned for the Public Sector Development Programme (PSDP) 2009-10 and the allocation for the defence budget is likely to be around Rs 343 billion.
The budget proposal estimates foreign and domestic debt servicing at Rs 655 billion, Rs 70 billion have been earmarked for the Benazir Income Support Programme (BISP), allocation for the rehabilitation of the internally displaced persons (IDPs) is likely to Rs 50 billion, while the Earthquake Reconstruction and Rehabilitation Authority (ERRA) is likely to get Rs 25 billion for the year 2009-10.
According to the government’s estimates, expenditures in the coming year will amount to Rs 745 billion.
Another proposal considered in today’s special cabinet meeting is a proposed increase in the salaries of government officials by 20 percent, or an alternate remedy of merging two ad-hoc relief allowances in the pay scales and than allowing the 20 percent increase.
According to another proposal included in the planned budget, government employees who retired before June 30, 1997, will get a 25 percent increase in their pension and those who retired on, or after July 1, 1997, will allowed an increase of 20 percent.
The tax collection target is likely to be set at between Rs 1.380 and Rs 1.390 trillion, with new taxes and duties amounting to around Rs 100 billion.
The existing petroleum development levy may be replaced by a Carbon tax of around Rs 6 to 12 per litre on petroleum, oil and lubricant products, likely to be imposed from July 1, 2009.
Two new taxes are to be imposed under the provincial legislation - 16 percent general sales tax is to be levied on 14 services sectors and 10 percent capital gains tax on real estate sector is also expected.
In the upcoming budget 2009-10, the federal government is likely to impose five to 10 percent duties on air conditioners, deep freezers and refrigerators, and around five percent on the import of and local sale of tea and coffee.
Two percent additional duty on cosmetics and perfumes, a 10 percent increase in the duty on cigarettes and a five percent additional duty on the import of cigarettes is also expected.
The government is also likely to tax the CNG business with the removal of the 16 percent subsidy on the import of CNG kits and equipment and may also likely withdraw the zero rating tax facility for the pesticides, stationery and dairy products sectors.
Withholding tax on cash withdrawal from bank accounts and a five percent duty on the registration of new cars are also likely to go.
The 16 percent GST on computer software and exclusion of some sectors from Presumptive Tax Regime (PTR) are also likely.