The Minister of Finance Dr. Hafeez Sheikh announced ?the federal budget-2012-13 today in the National Assembly. This was first ever 5th budget of a government in the history of Pakistan, as the previous governments have never been able to last for 5 years, the complete tenure of the assembly.
The Speech was made in the noise of the opposition, eventually the minister had to cut his speech short.
Several relief measures were expected to be announced for the income tax, federal excise duty and sales tax.
This year government is also considering a uniform sales tax at 16 percent.
Tax payer honour card has been introduced, which would entitle the taxpayers to certain facilities. Turnover tax rate is being cut to a half. The government wants to gradually eliminate the presumptive tax system in three years. Five percent tax on importers is being reduced to 3 percent, while 1 percent tax on exporters will be reduced to 0.5 percent. Withholding tax exemption limit of Rs25,000 on withdrawal of cash from banks is being raised to 50,000. Different rates of general sales tax to be done away with the imposition of a uniform 16 percent sales tax.
Sales on locally produced paper and canola ghee being declared zero rated. Sales tax on tea proposed to be reduced to 5 percent from 16 percent.
Custom duty highest rate instead of 35 will be reduced 30 percent. Besides custom duty on pencil, copy ink etc. is being abolished. Federal excise duty on cement is being reduced by Rs100 per ton. Custom duty on scrap used as fuel in cement factory will be reduced to 10 percent from 20. Custom duty on 94 items of pharmaceutical raw materials is being abolished.
Excise duty on mobile oil, base oil, lubricant is being lifted, Federal excise duty on livestock insurance is being done away, while federal excise duty of asset management companies also being abolished.
Electricity for steel mills would be costlier, as sales tax on per unit electricity to this sector has been proposed to be raised to Rs8 from Rs6.
The federal cabinet approved budget proposals with an outlay of 2.96 trillion rupees in a meeting chaired by the Prime Minister Syed Yousuf Raza Gilani.
The proposals, that included levying of no new tax, were given a go-ahead by the Cabinet, in a meeting chaired by Prime Minister Syed Yousuf Raza Gilani.
Dr Hafeez Sheikh told the parliament that the government has set an inflation target of 9.5 per cent, fiscal deficit of 4.7 per cent, national development outlay of Rs 873 billion with a federal Public Sector Development Program (PSDP) of Rs 360 billion, and a revenue target of Rs 2504 billion.
Duty on raw material for 88 medicines has been reduced from 10 to 5 per cent.?Moreover, sales tax on imports has been standardised at 16 per cent from 22 per cent to 19.5 per cent, while the minimum tax slab has been increased to Rs 400,000.
Protest overshadows budget speech
Intense protest in the National Assembly marred proceedings on Friday as opposition lawmakers hijacked the unveiling of the new budget, trading punches during angry scuffles in parliament against power cuts and corruption.
Parliamentarians traded blows and slaps, as they pushed and shoved each other on the parliament floor, grabbing each others clothing.
The finance minister was surrounded by 25 to 30 opposition parliamentarians who filled the space between his podium and the speaker?s dais, heckling and shouting through his speech, an AFP reporter said.
?End load shedding,? they cried. ?This government is stealing electricity,? ?the corrupt rulers should quit,? ?let the poor live,? ?respect the constitution? and ?people want electricity, water and gas,? they shouted.
This is the first time in Pakistan?s history that a democratic government has presented its fifth national budget during its tenure.
? Subsidies of Rs.1,250 billion given on electricity sector during last five years
? Govt injected 3500 MW of electricity to National Grid
? Pakistan to get 2 billion cubic feet of gas from Pak-Iran Gas pipeline, Turkmenistan-Afghanistan-Pakistan India gas pipeline.
? 500 million cubic feet of LNG will be made available for consumers
? Govt gave reilef of Rs.70 billion on petroleum products
? National Economic Council approved Annual Development Plan of
? Federal Government share in Annual Development Plan is Rs.300 billion
? 200 projects completed under Public Sector Development Programme (PSDP) at a cost of Rs.300 billion.
? Govt allocates Rs.360 billion under PSDP for 96 ongoing projects
? Rs.69 billion earmarked for Electricity secton, WAPDA, Electric Companies will be given Rs.115 billion
? Rs.48 allocated for Water sector, Rs.44 billion for Social
? FATA, Gilgit-Baltistan, AJK to get Rs.37 billion
? Rs.16 billion allocated for Higher Education
? Rs.84 billion allocated for Transport and Communication (Rs.51 billion for NHA, Rs.23 billion for Railways)
? Balochistan share incrase upto 9.09% in Divisible Pool
? Govt accepted Rs.120 billion as royalty on gas sale from 1954 to 1991 for Balochistan
? Federal Government to finance 11500 jobs for Baloch youth
? Block Development Allocation enhanced up to Rs.16 billion for
? Rs.10 billion allocated for mega project in Gilgit-Baltistan
? Rs.17 billion allocated in PSDP for FATA
? Rs.12 billion for development projects, Rs.16.5 billion allocated for cuerent expenditure for Azad Kashmir besides a loan of Rs.8.5 billion
? Remittances by overseas Pakistan touch $ 13 billion mark during last two years
? Exports register 28% increase, volume touches $ 25 billion mark