PTI unveils its first federal budget for FY2019-20

  • No raise in salary for civil servants serving in Grade 21, 22
  • 5% increase in salaries of govt servants serving in Grade 17-20
  • Minimum wage increased to Rs17,500
Pakistan

ISLAMABAD – Minister of State for Revenue Hammad Azhar on Tuesday unveiled the federal budget for the fiscal year 2019-20 estimated to be having an outlay of Rs6 trillion.

Flanked by Finance Adviser Dr Hafeez Shaikh in the National Assembly, the minister highlighted in his speech that the civil budget has been decreased from Rs460 billion to Rs437 billion while the Defence budget will remain at Rs 1,152 billion.

The budget outlay is Rs7,022 billion which is 30 per cent higher than last year.

The minister lamented that there has been no increase in exports in the past five years adding that due to financial mismanagement, the deficit reached Rs2260bn while the Circular debt in the energy sector reached Rs1200bn.

The lawmaker said measures taken by the PTI-led government have resulted in remittances increasing by $2bn, while the circular debt was decreased by Rs12bn per month in the energy sector.

Highlights of the budget:

  • 10 percent increase in salaries of govt servants of Grade 1-16.
  • Govt servants serving in Grade 17-20 to get 5 percent ad-hoc relief.
  • No increase in salaries for civil servants serving in Grade 21-22.
  • Special conveyance allowance of disabled employees increased to Rs 2000.
  • Pension increased by 10 percent for both civil and retired military men.
  • 1o percent decrease in salaries of ministers.
  • Gain tax to be imposed on plot for selling it before 10 years.
  • Minimum wage increased to Rs17,500.
  • 2 percent increase in tax on cold drinks.
  • Rs 2.5b set aside for insurance of crops.
  • Rs2,843.094 m allocated for the housing sector.
  • Rs20b earmarked for Diamer Basha Dam.
  • Rs 80b allocated for the energy sector.
  • Tax revenue target set at Rs5.5 Trillion.
  • Proposal to eradicate VAT on mobile phone import.
  • Rs 45.5b earmarked for 9 development schemes of Karachi.
  • Rs200bn will be earmarked to providing power at subsidised rates to low power consumers.
  • Rs110b set aside for giving Rs 50,000 monthly income support to extremely poor households.
  • Rs80,000 will be given as interest free loans under a mother and child nutrition program.
  • Revenue appropriated for the Federal Board of Revenue will be Rs5,500b.
  • Rs1,700 million allocated for the two ongoing schemes of Defence Production Division under the Public Sector Development Programme (PSDP) 2019-20.
  • Rs700 million reserved for Infrastructure Upgradation of Karachi Shipyard and Engineering Works (KSEW).
  • Rs 16 billion earmarked for Railways Division while Rs13 b allocated for Health Sector.
  • Rs29047 allocated for Higher Education Commission (HEC) schemes under PDSP.
  • Rs. 516.126m for Information & Broadcasting Division in PSDP.
  • Federal budget deficit to remain at Rs 1560b.
  • GST to remain at current 17 percent.

The minister highlighted that government expenditure has been decreased from Rs460 to Rs437 billion.

Excise duty on cars

The Budget 2019-20 recommends that cars of up to 1000 CC see a federal excise duty of 2.5 per cent; cars above 2000CC see a federal excise duty of 7.5pc imposed.

Sugar tax advised to be increased to 17pc

The sales tax on Sugar prices, which previously stood at 8.5 per cent, will now be increased to 17 per cent.

Also, Sugary drinks will see an increased tax duty of 13.2% as compared to the previous figure of 11.25%.

GST remains unchanged at 17pc

The general sales tax on goods, while remaining unchanged, will stand at 17 per cent for FY2019-20.

Food items supplied to bakeries and restaurants will be taxed at 4.5%.

Opposition Registers Protest

Leader of the Opposition in the National Assembly, Shahbaz Sharif, PML-N parliamentary leader in the National Assembly Khawaja Asif along with some other party members are wearing black armbands in the parliament as a protest.

The opposition members laterwards gathered in front of the Speaker’s dice and started chanting slogans against the government.