Pakistan

The federal budget of Rs 7400 billion for the next financial year will be presented today

ISLAMABAD: The federal budget for the next financial year 2020-21 comprising a total of Rs 7600 billion with a deficit of over Rs 3400 billion will be presented by the federal government today.

A special meeting of the federal cabinet chaired by Prime Minister Imran Khan will also decide on the approval of the budget and increase the salaries of government employees. It has been decided to set up a Counter Terrorism Index Management System to curb currency smuggling and terrorist financing to meet the requirements of the International Monetary Fund.

According to sources in the Finance Ministry, the target for tax revenue in the budget for the next financial year is Rs 4950 billion. The deficit is likely to be more than Rs 3427 billion. It is estimated that Rs. 3235 billion will be spent on interest and repayment of loans. It may be proposed to allocate Rs. 1402 billion for defense.
According to sources, the federal budget is likely to spend Rs 475 billion on pensions, while a budget of Rs 495 billion could be set aside for federal ministries and departments. The federation can spend Rs 260 billion on subsidies. The federal government can release Rs 820 billion in grants, the federal development budget will be kept at Rs 650 billion.

Sources said that the International Monetary Fund (IMF) has called for the abolition of sales tax exemption in all sectors. Tax rates for non-filers are likely to increase. Income tax and FED for non-filers may be increased, GST rate for non-filers is also proposed to be increased from 17%. According to sources, there is no possibility of any income tax exemption for the salaried class. Unregistered individuals may also be denied input tax credit.

According to sources, customs and excise duties on imported machinery are likely to be reduced by up to 3 per cent. More relief will be provided in the budget due to the Corona virus. A proposal to reduce duty on imported machines for the sectors is also under consideration.

Earlier in the day, Federal Finance Adviser Abdul Hafeez Sheikh, while releasing the details of the National Economic Survey, said that the corona epidemic virus has caused a loss of Rs 3,000 billion to the national economy. No new tax will be imposed in the budget for the next financial year.

Who will present the budget?

According to parliamentary sources, Finance Advisor Abdul Hafeez Sheikh cannot present the budget as only the Federal Minister of Finance can present the budget under Rule 184 of the National Assembly.

The Speaker also briefed Prime Minister Imran Khan on the views of legal and constitutional experts. According to experts, in the absence of the finance minister, any federal minister can present the budget at the discretion of the prime minister, so it is likely that the federal minister for economic affairs, Hamad Azhar, will present the budget. A meeting of the National Assembly has been convened at 4 pm today to present the federal budget.

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Naeem Ur Rehman

Pakistan's youngest blogger and the CEO of Raabta.net. He is currently the student of BS Environmental Sciences at University of the Punjab, Lahore. He is also working as a senior advisor to Aagahi.pk, Mukaalma, and Pylon TV.
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