ISLAMABAD: Though experts question the moral authority of the government to present the 6th budget, an announcement by the Khyber Pakhtunkhwa (KP) government has stated that it will not present the budget for the next financial year because of the position the party has taken against the PML-N governments at the Centre and Punjab. Adviser to Prime Minister on Finance and Revenue Miftah Ismail has claimed that his government has the right to promulgate the budget of 2018-19.
Talking to media after two budget-related programs in Islamabad on Monday, Miftah said that all provinces were duly informed about the government’s plan to give the budget. “As long as the national assembly exists, the present government has the moral authority to give the budget. At least the government stands at a higher moral ground as compared to an interim setup,” he said, adding that no new schemes were being added in the next budget. “Almost 80 per cent of the budget is usually prepared by the ministries and FBR. If the opposition parties wish, we may also provide an expenditure plan for four months in the budget,” he added.
Talking about the general perception that FBR will lose almost Rs500 billion worth of revenue after the government’s decision to change the tax threshold on the salaried class, the adviser said the impact of the decision should not be analysed mathematically. “Those who try and save on taxes will ultimately spend somewhere, subsequently giving the same under other taxation heads,” he said while justifying the exemption of taxes on salaries up to Rs0.1 million.
To a question, he said that defence allocation will see the usual rise in the next budget.
Miftah said the gross domestic product (GDP) of Pakistan should be above 10 per cent. Unfortunately, it has not risen above four per cent in the last five years’. He said the rupee was devalued by 10 units in the current fiscal year, however, this did not translate into an increase in prices. “Rupee was devalued in accordance with an independent policy,” he added. Miftah said, “Owing to the devaluation of rupee in March, exports increased by 24 per cent in that month and are expected to increase by a further 20 per cent in the next two months.”
Responding to a question after his address regarding the expected GDP growth rate of 5 per cent during the next year projected by the Asian Development Bank and the World Bank, the adviser said last year the government targeted the country’s growth at 6 per cent, however the ADB, IMF, and WB projected only around 5 per cent, but in reality, the growth remained at 5.8 per cent – very close to the government’s target. He said during the current fiscal year, the country was going to achieve 5.8 per cent GDP growth – very close to the government’s target of 6 per cent during the year 2017-18.
Addressing a pre-budget seminar organised by SDPI, the advisor claimed in the last five years, there has been progress in industries, agriculture and service sectors of the economy. “Today, an additional 10,000 megawatts of electricity is being generated in the country. Gas and electricity are being produced and they are able to meet the requirements of industries,” he said.
Stating that in the last five years, steps have been taken for the improvement of the economy, Ismail said, “The GDP in the ongoing fiscal year will be 5.8 per cent and inflation has been maintained below four per cent.”
“We will give tax relief in the upcoming budget,” the finance adviser said. He added that middle-income earners will be given relief in the upcoming budget.
Talking about the amnesty tax scheme, Miftah said those who do not pay taxes will not be allowed to buy land after July 2018. He said that the National Database Registration Authority (NADRA) is providing the government with data on eligible taxpayers. “NADRA will be providing one million people who are liable to pay taxes to FBR,” he said. “NADRA and FBR will identify rich people and will bring them into the tax net”, he added.
The most fundamental reforms were taken in the real estate sector and according to the new policy, no non-filer will be able to purchase any real estate property, he added.
Talking about the expected rise in salaries and perks of government employees in the next budget, Miftah Ismail said that the Prime Minister had specially advised him to announce a special package for government employees and pensioners in the upcoming budget 2018-19. He said although the inflation rate was under five per cent, the government will give more relief to employees and pensioners.