Pakistan Budget for the year 2009-10 is on its way and no one is much concerned as there are a lot of other issues that’s require immediate attention. In any case, we think that we need to initiate a blog post that we will keep updating regarding the news related to Pakistan Budget 2009-2010.

21-May-2009: Real Estate, Shares Trading and Services Sectors to be Taxed in Pakistan Budget 2009-10
ISLAMABAD: Information Minister Qamar Zaman Kaira on Wednesday hinted that the government may bring the real estate, stock exchange, services and agriculture sectors under the tax net in the coming budget for the fiscal year 2009-10.
Briefing newsmen here after the cabinet meeting that was chaired by Prime Minister Syed Yousuf Raza Gilani, the minister said the cabinet appreciated improvement in the economic conditions of the country despite internal and external challenges, approved five per cent quota for minorities in government jobs and addition of security features in Rs500 note. Though the minister hinted that the four new sectors may be brought gradually under the tax net, he did not give any further details in this regard.
However, when questioned specifically whether the cabinet has taken a final decision to bring the agriculture sector into the tax net in the coming budget, he said the question of bringing the agriculture income into the tax net arises when this sector sustains itself.

He said due to government’s good fiscal policies various economic indicators, including the current account deficit, the fiscal deficit and the inflation rate, have improved significantly. Kaira said the country could not be run only on foreign aid and the government would impose taxes on new sections of the society. However, the number of taxes would be reduced, he added.
He said five per cent quota for minorities in all government and semi-autonomous departments would be strictly maintained, as minorities, too, have equal rights over resources of the country. (source The News)

Updates

ISLAMABAD ( 2009-06-14 04:36:35 ) :The Minister of State for Finance and Economic Affairs, Hina Rabbani Khar, on Saturday unveiled the Federal Budget for 2009-10, according to which total outlay for the next fiscal year will be Rs 2.482 trillion, which is 23.5 percent higher than the budget estimates of 2008-09.

Rs 646 billion allocated for PSDP Rs 722.7 billion gap to be financed with Rs 264.9 billion foreign loan and Rs 457 billion domestic borrowing Rs 660 billion to go to debt servicing Rs 175 billion administrative expense

– Reckons IMF conditionalities

– Targets 4.9 percent fiscal deficit

– Shows relatively moderate burden of new taxes

– Seeks industry’s revival

The consolidated budget of the federal and provincial governments has been estimated at Rs 2.897 trillion, whereas total resources are estimated at Rs 2.174.9 trillion, with a consolidated budget deficit of Rs 722.7 billion, or 4.9 percent of GDP, which is 1.5 percent higher than what was agreed in the Letter of Intent (LoI) agreed with the International Monetary Fund (IMF) in March 2009.

This deficit will be financed by Rs 264.9 billion foreign and Rs 457.6 billion domestic loans. Analysts are of the view that the government may have agreed with the IMF team to slash the development program by the end of the year to meet the agreed target of budget deficit or may later renegotiate the target based on global economic performance.

Total resource availability during 2009-10 has been estimated at Rs 2.318 trillion, against Rs 1.836 trillion in the budget estimates of 2008-09. According to official budget documents, net revenue receipts for 2009-10 have been estimated at Rs 1.372 trillion, indicating an increase of 23.3 percent over the budget estimates of 2008-09.

The provincial share in federal revenue receipts is estimated at Rs 655 billion during 2009-10, which is 15.3 percent higher than the budget estimates for 2008-09. The capital receipts (net) for 2009-10 have been estimated at Rs 191 billion, against Rs 221 billion budget estimates of 2008-09.

The external receipts in 2009-10 are estimated at Rs 510 billion, which shows an increase of 70 percent over the budget estimates of 2008-09. The overall expenditure during 2009-10 has been estimated at Rs 2482 billion, of which the current expenditure is Rs 1699 billion, and development expenditure at Rs 803 billion.

Current expenditure shows an increase of 3.5 percent over the revised estimates of 2008-09, while development expenditure will increase by 68.1 percent in 2009-10 over the revised estimates of 2008-09. The share of current expenditure in total budgetary outlay for 2009-10 is 68.5 percent, as compared to 79 percent in the revised estimates for 2008-09.

The expenditure on General Public Services (inclusive of debt servicing transfer payments and superannuation allowance) is estimated at Rs 1189 billion, which is 70 percent of the current expenditure. The size of Public Sector Development Program (PSDP) for 2009-10 is Rs 646 billion, while for other development expenditures an amount of Rs 157 billion has been allocated.

The PSDP shows an increase of 54 percent over the revised estimates 2008-09, which were mercilessly slashed during the current year to meet the budget deficit target agreed with the IMF. The provinces have been allocated an amount of Rs 200 billion for budget estimates 2009-10 in their PSDP.

An amount of Rs 25 billion has been allocated for Earthquake Reconstruction and Rehabilitation Authority (Erra) in the PSDP 2009-10. However, there are no foreign loans expected for this purpose in 2009-10. The budget for fiscal year 2008-09 was estimated a total of 31250 million rupees but the revised estimates gave a zero figure. It is not clear whether this is indicative of the donors’ backing out of their commitments.

Copyright Business Recorder, 2009

Excerpts from Budget Speech (highlights)

• Budget speech started by Federal Minister Hina rabani Khar
• We missed some initial part since internet was giving tough time. Currently Agriculture sector in progress
• Excise duty on cellular down to 19%
• Excise duty on CKD down by 5%
• Regulatory duty on handsets of Rs. 250 abolished
• Rs. 50 bn allocated for IDPs
• Salaries to be raised from July 1
• Rs 264.9 bn foreign aid expected
• Petroleum leyv for development to end in Fy10
• Witholding tax on domestic vehicles ended
• SIM activation charges reduced from 500 to 200
• Most importance to be given to electricity and gas
• Corporate and rehabilitation act in final stages for Industrial sector
• Industrial relations act approved by cabinet for relationship between employer and employees
• NHA to get 40.2 bn (increased from 36 bn)
• Allocation for agri sector to be 18 bn
• Health secotr to get 23 bn (61% increase)
• Fata payables for PEPCO to be paid by Govt
• Current excise duty on cement to be reduced
• Souther Punjab to get power project
• Govt approves 2.2 bn for enviornment
• Education ministry to spend 2 bn on developing community schools and improve primary education
• 6419 new towns will be given electricity
• 4 bn allocated for Diamer Bhasha Dams
• 11 bn to be spent on PMs disease control program
• Tax on Ciggerattes to be increased
• Increase in CVT to generate 15 bn in revenue for FY10
• Benazir Human rights commission to be set up for Human rights
• National internship program to get 3.6 bn for 30,000 internships for youth
• 583 millions for sports
• Govt. employees to get 15% raise in salaries
• 15% adhoc relief allowance for army men on western borders (this will finish in december, since it is adhoc)
• Education to get 31 bn
• GDP growth in fy10 expected to be 3.5%
• Rehabilitation of earthquake affected to continue. 25 bn allocated
• CVT on real estate to increase to 4% from 2%
• Clean water allocation 47.2 bn
• Hina Rabbani Khar ends her speech with a positive note

To Download the Complete Budget Speech Click below link

Click here for English Version Speech of Pakistan Budget Speech 2009-10 (PDF)

Click here for Urdu Version Speech of Pakistan Budget Speech 2009-10 (Gif File)

To Download the Salient Features of Pakistan Budget 2009-2010 Click here

Update ( 2009-06-18 14:21:41 ) : The government on Thursday withdrew the decision of levying carbon surcharge on Compressed Natural Gas (CNG) by deleting the word “carbon” from the head of the levy. Now “surcharge” will be used for taxing petroleum products from the next financial year i.e. 2009-10 after severe drubbing from different quarters.

Updated at: 1323 PST, Friday, June 19, 2009: Prime Minister Syed Yousuf Raza Gilani agreed on the proposal of 20 percent increase in salaries and pension of government employees, Geo News quoted Minister for Overseas Pakistanis and Parliamentary leader of the MQM Dr Farooq Sattar as saying on Friday. The federal minister said the 20 percent tax on the SMS might be eliminated. He said the Prime Minister and Adviser to the Prime Minister on Finance Shaukat Tarin agreed on the proposal that salaries of grade 1 to 16 employees would be raised by 20 percent. It should be mentioned that a delegation of ministers of Muttahida Qaumi Movement (MQM) called on Prime Minister to discuss the prevailing power crisis in Karachi.

Update: Tax on SMS has been removed.

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