Re: Budget 2013
why do they like to just hand out sh!t
be it laptops..10,000 rps...blah blah blah
Re: Budget 2013
I think, budget had some good points and some bad points, plus lots of claims that are lies. Let me go through few aspect of budget (according to my analysis).
Some good points are: Income support fund is to continue and to be further expanded. I prefer name change (if it really happens) from BeNazir income support to Income support, as a country based project should not have name of any politician, or person.
Some people do not like the idea of giving cash support to poor families and many question Rs 1000 a month as peanut for a family to live. I think both groups are wrong in their thinking or are insensitive.
First of all, Income support is not there to make a family live on it, rather it is support to income of poor. For a family with household income of several thousand rupees a month, an addition of Rs 1000 to their income makes lot of difference.
Last year government spent around R50 billion on income supports and Nawaz government increased that amount to Rs 75 billion and also increased payment from Rs 1000 to Rs 1200. I think that it was good step, as this Rs 75 billion would give relief to most needy people of Pakistan, and thus is more important (and most appropriate) than any budget allocation (or government expenses).
Further, this Rs 75 billion government expenditure would be most productive for Pakistan economy, as all of those Rs 75 billion would be consumed on local goods and services, and that means economic activity that is surely going to boost local economy and its impact will be positive on country's economy, that would increase country's economy far greater than Rs75 billion in positive way (I believe, its impact would increase country's economy by at least Rs 200 to 300 billion). This expenditure would also help in reducing misery of people, and that is also positive for country (that is responsibility of state and thus government in power ... that is to reduce misery of most vulnerable section of society, and facilitate them in life).
[If giving cash to needy was bad, what some insensitive people like all to believe, than Allah would not have made Zakat fard on people with means]
Second good thing about the budget is getting rid of all secret funds and reduction in government unproductive expenditures
Third good aspect of budget (that some might not like it) is not increasing wages of government servants, who have seen several fold increase in their wages since 1999 ... and seen at least 3 times or 300 percent wage increase since 2008. Such step would control wage increase in private sector and would restrain inflation as well as money supply. Other effect would be stabilising Pakistani currency, as restrained inflation and controlled money supply boosts exchange rate.
Some Bad points of budget are: Not introducing tax on agricultural income. This was needed badly and government should have done that, but not bringing agricultural income means loss of billions of rupees from national revenue, and that would affect countries development. Another effect of not taxing agricultural income is promoting tax avoidances in country, because when people see that a privileged group (people getting income from agriculture) are not paying taxes, then why they pay tax?
Keeping agricultural income out of tax net also means, many rich industrialists keep agricultural land and show all their income coming from agriculture, and show that their industry is making loss. In this way, they keep luxurious life without fear of Tax people.
Another bad point of budget is increasing sales tax from 16 to 17 percent. This is not only unfair but would cause lot of grudges amongst poor and middle class, as such tax mostly effect poor and middle class. It also plays a minor role in increasing inflation.
BSs of Ishaq Daar: As for what Ishaq Daar claimed about PMLN government past reforms and successes, most what he mentioned was BS and Lies. For instance, he claimed that during his last government, tax to GDP ratio was around 15 percent and debt was not as high as it is today … all is BS. Tax collection in 1999 was around 10 percent of GDP, and debt what Nawaz government left in 1999 was around 100 percent of GDP, whereas today it is around 65 percent … that was around 52 percent in 2008 (Note: Debt of individuals or country is never measured in absolute terms, but is is measured with respect to income or GDP … anyhow, some shrewd individuals if it suit them, mention debt in absolute term to fool ignorant and unaware masses).
Some differences between state of economy PMLN left and state of economy PMLN is inheriting, is that:
PMLN government in 1999 left a bankrupt country with negligible foreign exchange reserve, stagnant economy, stagnant tax collection, stagnant export (rather stagnant external trade), extremely high debt, extremely high debt servicing cost, high interest rate, medium inflation and fast depreciating currency.
Today, Pakistan is not a bankrupt country, has reasonable foreign exchange reserve, moderaterly growing economy, increasing tax collection (though not as desired), increasing export, certainly high debt that is increasing fast too (though situation is much better than what it was in late 90s), much lower debt servicing cost (with respect to GDP) then 1999, high interest rate (though lower than 1999), declining inflation (though similar to what it was in 99), and fast depreciating currency (again not as bad what it was happening in late 90s).
Re: Budget 2013
Last year government spent around R50 billion on income supports and Nawaz government increased that amount to Rs 75 billion and also increased payment from Rs 1000 to Rs 1200. I think that it was good step, as this Rs 75 billion would give relief to most needy people of Pakistan, and thus is more important (and most appropriate) than any budget allocation (or government expenses).
Do you really believe the money is actually going out to poor and needy? With kind of massive rigging in elections where dead people casted their votes, I can easily imagine distribution of this money to friends and neighbors. In the best of estimate may be Rs 10 billion would get to the real needy. Instead of pouring money down the drain (the corruption part) if govt can only invest in projects that would help labor/poor people get jobs it would be in much wider interest of the nation.
Re: Budget 2013
Do you really believe the money is actually going out to poor and needy? With kind of massive rigging in elections where dead people casted their votes, I can easily imagine distribution of this money to friends and neighbors. In the best of estimate may be Rs 10 billion would get to the real needy. Instead of pouring money down the drain (the corruption part) if govt can only invest in projects that would help labor/poor people get jobs it would be in much wider interest of the nation.
Yaar ... think. :) ... If government fiddles money meant to be given to poor and needy directly, then what is chance government would not fiddle the money that would go on projects?
Actually, in most cases money spent on projects are easily grabbed by corrupt leaders (in the form of commission, over invoicing, project selection, etc), and projects rarely benefits poor and needy, as even when completed, such projects only benefits people corrupts like, due to nepotism and patronizing.
On the other hand, when money gets distributed to millions of poor and needy, directly as bank transfer (as what happens in Pakistan income support) than chances that corrupt leaders grab the money is less likely, and its benefit to poor and needy is also direct and most effective.
Regardless, direct help to poor and needy is not only best and most effective way of helping poor and needy, but it is most preferred way all over the world. Even in Islam, direct way of helping poor and needy (giving them cash) is preferred ... in the form of Zakat, Khairat, Sadqa, Fitra, or whatever charity one wants to give to poor and needy.
Re: Budget 2013
Slashing import duty on cars.... BAD IDEA. Don't we have enough cars on roads already?
Re: Budget 2013
Slashing import duty on cars.... BAD IDEA. Don't we have enough cars on roads already?
I do not think idea is too bad. Protecting local car industry (they are foreign companies anyhow) is fine for first few years, but not forever. I think high import duty was only making local car industry exploiting the situation without working for improvements. Low import duty would create some sense of competition, resulting in higher quality and reduction in price of locally manufactured cars (less exploitation).
And please do not say that we have enough cars, unless you would not like to have car yourself.
If you, me or any person who can afford a car, then they should not be discouraged to have car on ground that Pakistan has too many cars on road, as that thinking is discriminatory. One should think that what is good for me, is good for all.
It is duty of government to collect taxes indiscriminately (that means, on all incomes wherever it came from, including agriculture), shun corruption, work hard, give good management to country, and provide every desirable services to Pakistanis ... and that means make roads where it is required.
Re: Budget 2013
.....It is duty of government to collect taxes indiscriminately (that means, on all incomes wherever it came from, including agriculture), shun corruption, work hard, give good management to country, and provide every desirable services to Pakistanis ... and that means make roads where it is required.
When Daewoo started local bus service in Lahore, I preferred to use it over driving to work. I would still prefer public transport if it is reasonably comfortable. The ghunda gardi by local transporters pushed Daewoo out of the market.
I don't like the idea of local car manufacturers 'lobby' in Pakistan but government should not use it as an excuse to slash import duty on cars either. If you cannot impose fair market regulation, its YOUR fault, not manufacturers. And please do not call those 'locally manufactured' cars. They are still mostly 'assembled' in Pakistan and most of the profit is transferred out of the country through over invoicing of imported parts. India did not let any car manufacture invest in India till they committed to manufacture 100% in the country. Have you ever seen what kind of cars Indian ministers and generals still use?
My preference would still be to tax luxury cars even more heavily and invest in public transport. Salaried people cannot afford those cars and the ones buying them do not pay income tax anyways. What's the point of having those huge 4x4s roaming around in cities, apart from 'dhaak bithana'?
Yes we have too many cars on the roads and our kids would simply choke to death if this continues.
Re: Budget 2013
Over all excellent budget under the circumstances.. Lot of belt tightening.. Get ready to pay more taxes..
1) Salaries of some 2.5 million government employees have not increased. There was no money to do it..
2) Tax collection target has been raised to Rs. 2475 billion rupees.. mostly the assumption is that this raise will be achieved through better implementation of existing tax laws.. through better enforcement..
3) Power subsidy has been slashed to half.. Power sector is consuming over Rs. 600 billion.. get ready to pay higher electricity price.
4) Federal exemption on agriculture income will be granted only in case the agriculture income tax is paid to the provincial government. This means all the provincial governments will now be forced to enforce agriculture income tax.
5) The auto industry is being protected for last 20 years through tariff controls at the expense of the consumers. They will face competition from more fuel efficient hybrid cars. They will have to increase the efficiency now.. make better cars and sell them at lower price.
6) There is major belt tightening on unproductive government expenditures.. discretionary funds, luxury government spendings, secret funds, media funds etc. etc.
I'll keep on adding some salient features and actual implications of certain budget proposal as I get more time.
As far as the comment that our economy is in better condition with respect to 1997.. is a major misconception and far from being true.
Our fiscal deficit is hovering around 9% of GDP.. which was never more than 4-4.5% of GDP in 90s. Our debt servicing was never over 25% of budget spending.. while today it's consuming over 42%.. Pepco losses of Rs. 600 billion and state corporation losses of Rs. 500 billion were not there in 90s (At least not to this extent). We are today trapped in a much vicious trap than ever with fiscal space is squeezed like never before in the history of the country..
Re: Budget 2013
What is the new import duty on used cars? Is it still have boundation of three years for non commercial vehicles?
Re: Budget 2013
from a layman's view i think there are few good few bad things as everyone said.
- laptop again: not good if they had to do it, they could delay it atleast for next 2 years, and use this money for other more needy sectors
- forcing provinces to collect agriculture tax, this seems good in the sense each provincial govt will be encouraged to enforce their own reforms in this area, all political parties keep blaming center (whoever is in center) that they do not collect agriculture tax, now its their job, lets see how MQM does this, they will soon join sindh govt as per news in media
- complete removal of "special/secret funds" save this money, spend in energy sector. almost everyone has been asking for this for long time, good that they announced it now.
- ending subsidy on luxury cars and removing tax from hybrids, some say will help us by encouraging more people to either buy local cars or if they have to import, go to hybrids to save much needed fuel expense
- no salary increase bad if they had no money now at least they could have raised very small at the beginning and raise it further by midyear or so.
also i must say some people are saying that funds reserved for education/health are very small and it shows govt's lack of interest in education/health, probably they forgot that these two sectors were handed over to provinces recently. Federal govt has increased share of funds that provinces will get, and they are free to spend as much as they want on whatever sector they want.
one thing i feel that they took decisions which are tough on public in the first budget, and gave chance to economy/industry to grow and try and become profitable, once we start getting money from there, public can be given relief in next budget or so.
Re: Budget 2013
No one is hilighting Income Support Levy @ 0.5% of Net Moveable Assets. 
saare polticians ghareeb bun jaenge while declaring their Wealth 
Re: Budget 2013
^ don't know but they said they will setup broad data collection from different sources to track such people. but funny thing is, they also have such people in their party, lets see how they can do it, looks difficult to implement keeping in view pakistani mindset of corruption
Re: Budget 2013
They have just made life of salaried persons miserable 
- No increase in Salaries
- Increase in Sales Tax rate
- Increase in Income tax rates on salaries
- Withdrawing powers of employers to give credit on account of Donations, Investments, etc while deducting tax from Salaries.
- Last but not the least, levying adjustable tax on catering, marriage lawns. When employer is not allowed to give credit for donations, etc how could an employee will get credit for advance tax paid to marriage lawns, etc. Getting refunds from Pakistan tax authorities is ‘joo e sheer lana’
Re: Budget 2013
-57 billion for higher education
-59 billion for water projects.. dam construction, flood protection, drainage system for Sind.
Both excellent allocations..
Re: Budget 2013
Tax paid on children education (private schools), marriage ceremonies etc are adjustable towards your total income tax liability… means you deduct these payments from your tax liability and pay less tax (no question of refund here).. However if your income does not justify these payments.. then of course you pay these taxes.
Re: Budget 2013
Tax paid on children education (private schools), marriage ceremonies etc are adjustable towards your total income tax liability... means you deduct these payments from your tax liability and pay less tax (no question of refund here).. However if your income does not justify these payments.. then of course you pay these taxes.
If you are a salaried person, you won't get a chance to deduct tax until filing the Return. Most of the the income of an individual (other than Salary Income) is covered under Final Tax Regime meaning i.e. tax deduction made at the time of payment of Interest, Dividend, etc is final discharge of liability for such income. If your employer is not able to give you credit for donations, investments, etc from Salary Income, then you have to file a refund application for getting credit of Donations, Investments, etc. with tax authorities and getting refund from Pakistan tax authorities is not an easy task.
Re: Budget 2013
If you are a salaried person, you won't get a chance to deduct tax until filing the Return. Most of the the income of an individual (other than Salary Income) is covered under Final Tax Regime meaning i.e. tax deduction made at the time of payment of Interest, Dividend, etc is final discharge of liability for such income. If your employer is not able to give you credit for donations, investments, etc from Salary Income, then you have to file a refund application for getting credit of Donations, Investments, etc. with tax authorities and getting refund from Pakistan tax authorities is not an easy task.
Believe me getting a tax refund in Pakistan is much easier-faster than most of the countries.. say Italy..
Re: Budget 2013
If you are referring to money begets money then I agree. Otherwise, its big no. 
Re: Budget 2013
gift from Naan league to the poor:
17% increase in tax on packed milk.
hamza sharif k business ko tu char chand lag gai :)
Re: Budget 2013
army retired officiers ki ballay ballay aur on service becharay