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Relief for some, hardship for most in budget
* Government employees garner biggest relief from new budget
* Benazir Income Support Programme to provide Rs 1,000 per month to qualifying households
* 20pc basic pay raise for civilian and military officials
* End of 15pc duty tax on CNG buses, energy savers
* Minimum wage raised from Rs 4,600 to Rs 6,000
* 10% job quota for women in govt departments
* Duty on 300 luxury items including big cars increased
* Increase in sales tax from 15 to 16 percent
* Duty on banking, insurance services raised to 10pc
* Withholding tax on cash withdrawal from banks now 0.3%
By Rana Qaisar/Sajid Chaudhry/Irfan Ghauri
ISLAMABAD: The coalition government on Wednesday announced a Rs 2.1 trillion federal budget for the 2008-09 fiscal year, providing relief to government employees and problems for the industrial sector.
However, the revenue target is Rs 1.11 trillion, referring to an estimated budget deficit of Rs 582 billion, or 4.7 percent of the GDP. Finance Minister Syed Naveed Qamar presented the budget before the National Assembly after the federal cabinet formally approved it. Setting a growth target of 5.5 percent, the government announced that the budget would contain inflation at 12 percent and the gross investment to GDP ratio would be maintained at 25 percent. It also announced that foreign exchange reserves would be increased to $12 billion.
Relief: Government (civil and military) employees received 20 percent increases in basic pay and pension in the 2008-09 budget, with the minimum pension increasing to Rs 2,000. The government also announced a 100 percent increase in conveyance allowance of grades BS-1 to BS-19 employees; an increase to Rs 500 in medical allowance for employees of grades BS-1 to BS-16; a Rs 6,000 minimum wage; removal of requirement of 10 years service for benefits; and regularisation of BS-1 to BS-15 contract employees. The government also announced that subsidy on fertilisers had been increased from Rs 25 billion to Rs 30 billion. It said the subsidy on DAP fertiliser would be doubled, while subsidies on other fertilisers would also continue.
With regards to the industrial sector, the new budget increased customs duty on import of CKD/SKD sewing machines, and proposed abolishing the 15 percent duty on import of CNG buses and exempting energy savers from sales tax. It also suggested extending for two years the exemption from capital gain tax on sale of shares of companies listed on the stock exchange.
Support programme: During his budget speech, the finance minister informed the National Assembly that the Benazir Income Support Programme, with an initial allocation of Rs 34 billion, would allow cash grants of Rs 1,000 per month to all qualifying households.
According to the minister, the beneficiaries would also be provided other facilities, including employment, medical insurance and food subsidies.
Qamar also announced the establishment of a Human Resources Development Commission to review the state of unemployed people and said the national internship programme would continue.
He said the government had also approved a 10 percent quota for women in all government departments and proposed banning the purchase of physical assets, such as cars and air conditioners, as part of the economy drive. Qamar also announced that the National Accountability Bureaus budget would be cut by 30 percent, adding that the duty on around 300 luxury items should be increased to 35 percent to discourage imports, APP reported.
The budget also proposed that Rs 500 would be charged for the import of each cellular phone and suggested increasing the duty on cars up to 1,800cc or more from 90 to 100 percent. The government also suggested increasing sales tax to 16 percent and raising federal excise duty on banking, insurance and franchise services to 10 percent. The budget also proposed to increase withholding tax on cash withdrawal from banks from 0.2 percent to 0.3 percent.
Taxable income for salaried persons was also increased to Rs 180,000. For women, it would be Rs 240,000. This would provide relief to more than 74,000 taxpayers, NNI added. The government has also proposed that different income slabs should be charged property tax differently from five to 15 percent..
Qamar also announced Rs 2 billion to support the premiers special initiatives for housing of low-paid government employees and proposed allocating Rs 2.6 billion for clean drinking water.
Daily Times - Leading News Resource of Pakistan
* Government employees garner biggest relief from new budget
* Benazir Income Support Programme to provide Rs 1,000 per month to qualifying households
* 20pc basic pay raise for civilian and military officials
* End of 15pc duty tax on CNG buses, energy savers
* Minimum wage raised from Rs 4,600 to Rs 6,000
* 10% job quota for women in govt departments
* Duty on 300 luxury items including big cars increased
* Increase in sales tax from 15 to 16 percent
* Duty on banking, insurance services raised to 10pc
* Withholding tax on cash withdrawal from banks now 0.3%
By Rana Qaisar/Sajid Chaudhry/Irfan Ghauri
ISLAMABAD: The coalition government on Wednesday announced a Rs 2.1 trillion federal budget for the 2008-09 fiscal year, providing relief to government employees and problems for the industrial sector.
However, the revenue target is Rs 1.11 trillion, referring to an estimated budget deficit of Rs 582 billion, or 4.7 percent of the GDP. Finance Minister Syed Naveed Qamar presented the budget before the National Assembly after the federal cabinet formally approved it. Setting a growth target of 5.5 percent, the government announced that the budget would contain inflation at 12 percent and the gross investment to GDP ratio would be maintained at 25 percent. It also announced that foreign exchange reserves would be increased to $12 billion.
Relief: Government (civil and military) employees received 20 percent increases in basic pay and pension in the 2008-09 budget, with the minimum pension increasing to Rs 2,000. The government also announced a 100 percent increase in conveyance allowance of grades BS-1 to BS-19 employees; an increase to Rs 500 in medical allowance for employees of grades BS-1 to BS-16; a Rs 6,000 minimum wage; removal of requirement of 10 years service for benefits; and regularisation of BS-1 to BS-15 contract employees. The government also announced that subsidy on fertilisers had been increased from Rs 25 billion to Rs 30 billion. It said the subsidy on DAP fertiliser would be doubled, while subsidies on other fertilisers would also continue.
With regards to the industrial sector, the new budget increased customs duty on import of CKD/SKD sewing machines, and proposed abolishing the 15 percent duty on import of CNG buses and exempting energy savers from sales tax. It also suggested extending for two years the exemption from capital gain tax on sale of shares of companies listed on the stock exchange.
Support programme: During his budget speech, the finance minister informed the National Assembly that the Benazir Income Support Programme, with an initial allocation of Rs 34 billion, would allow cash grants of Rs 1,000 per month to all qualifying households.
According to the minister, the beneficiaries would also be provided other facilities, including employment, medical insurance and food subsidies.
Qamar also announced the establishment of a Human Resources Development Commission to review the state of unemployed people and said the national internship programme would continue.
He said the government had also approved a 10 percent quota for women in all government departments and proposed banning the purchase of physical assets, such as cars and air conditioners, as part of the economy drive. Qamar also announced that the National Accountability Bureaus budget would be cut by 30 percent, adding that the duty on around 300 luxury items should be increased to 35 percent to discourage imports, APP reported.
The budget also proposed that Rs 500 would be charged for the import of each cellular phone and suggested increasing the duty on cars up to 1,800cc or more from 90 to 100 percent. The government also suggested increasing sales tax to 16 percent and raising federal excise duty on banking, insurance and franchise services to 10 percent. The budget also proposed to increase withholding tax on cash withdrawal from banks from 0.2 percent to 0.3 percent.
Taxable income for salaried persons was also increased to Rs 180,000. For women, it would be Rs 240,000. This would provide relief to more than 74,000 taxpayers, NNI added. The government has also proposed that different income slabs should be charged property tax differently from five to 15 percent..
Qamar also announced Rs 2 billion to support the premiers special initiatives for housing of low-paid government employees and proposed allocating Rs 2.6 billion for clean drinking water.
Daily Times - Leading News Resource of Pakistan
