Pakistan Budget 2014 – 2015
Last year’s budget seemed to crush the poor and middle class people. Increase in GST, Petrolium products, Electricity and many more directly effected the common people. But the upcoming Pakistan Budget 2014 – 2015 will be against our expectations as it is directly targeting the ”common people” community.
According to the sources, the government is expected to impose new taxes of Rs 255 billion in the upcoming budget for the fiscal year 2014-15.
Pakistan Budget 2014 – 2015
Finance Minister of Pakistan Ishaq Dar has said that government is likely to raise salaries of employees by 10% in budget 2014-15 while talking to media after a meeting of Economic Advisory Council. Ishaq Dar told to EAC that opposition suggested an increase of 30%, however it is not possible due to prevailing economic condition of Pakistan. Prime Minister of Pakistan and Federal Cabinet will take final decision keeping in view the inflation rate and miseries of salaried class. As per another report, Prime Minister Nawaz Sharif government is planning for increase in pension and pay of employees from 12% to 20%. Low grade employees will get more percentage and higher scale employees will receive less percentage increase. Old Pensioners will get maximum increase in pension and new pensioners will get less increase in pension.
The new taxes will mainly hit middle-class segment and non-industrial class.
Besides, tax proposals include withdrawal of tax exemptions granted through Statutory Regulatory Orders (SROs) and increase in existing tax rates.
Sources told that amount of exemptions that can be withdrawn stood at Rs. 240bn out of total Rs. 440 billion in the upcoming budget. via ARY News
In order to qualify for the next IMF tranche, the government has proposed a revenue generation target of Rs. 2,810 billion for FY 2014-15, an increase of 24pc or Rs. 535bn from this year’s revised target of Rs. 2,275bn.
The IMF had given clear indications to Pakistan’s economic team regarding the finalization of budget proposals if Islamabad wanted to bring down the fiscal deficit as per the plan agreed upon with the IMF.
On the orders of the finance minister, the tax proposals for the next budget are being based on three key pillars: the withdrawal of tax exemptions granted through Statutory Regulatory Orders (SROs); an increase in existing tax rates; and the bolstering of revenue collection by widening the tax base.
Sources told that additional revenue, over and above the current fiscal target of Rs. 2,275bn, would have to be met through other measures and the withdrawal of tax exemptions.
Talking to Dawn, former finance minister and Institute for Policy Reforms Managing Director Dr Hafeez A. Pasha says that Pakistan today has one of the lowest tax-to-GDP ratios in all of Asia; lower than Bangladesh’s 10pc, India’s over 16pc, Sri Lanka’s 12pc, Malaysia’s 14pc, Thailand’s 18pc, the Philippines’ 12pc and Turkey’s 21pc.
He said Pakistan’s taxation system did not collect as much revenue as it should and that there were far too many concessions and exemptions granted, which cut into the overall revenue generation figures.
Mr Pasha suggested that the principal focus of the tax proposals for FY 2014-15 should be on the development of a direct tax regime, in order to make federal taxation more buoyant and progressive.
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