ISLAMABAD - The PTI-led federal government is seriously contemplating to amend Finance Bill 2018-19 to generate additional revenue, besides slashing down development budget.

The federal government has already termed the annual budget for the ongoing fiscal year as unrealistic. Sources revealed that the government might discuss revenue proposals in the federal cabinet meeting being held today (Thursday). The government would present mini budget in the upcoming session of the National Assembly.

The government would withdraw tax concessions for salaried class as approved by the Parliament. The last Pakistan Muslim League-Nawaz (PML-N) government had introduced tax exemption for people with annual income up to Rs1.2 million. However, the PTI government will reduce the slab from Rs1.2 million to Rs0.8 million. Federal Board of Revenue (FBR) had estimated that aforementioned concession had caused Rs100 billion revenue shortfall for the national exchequer. “The decision of previous government to reduce income tax rates was a political one without taking account of economic considerations,” said an official of the FBR.

The government is also considering a proposal regarding imposition of 1 per cent regulatory duty on all import items. This decision would not only help in generating revenues but would also reduce increasing import bill of the country. The soaring imports are widening the current account deficit of the country, which is eroding foreign exchange reserves.

The government is considering measures to achieve the desired tax collection target of Rs4,435 for the current fiscal year against collection of Rs3,842 billion during the previous fiscal year. FBR had revised its collection target to Rs3,935 billion but it had actually collected only Rs3,842 billion during the year.

On the other hand, the government is planning to cut the development budget massively. The Planning Division has been told in written to stop releasing funds to unapproved projects with less than 20 per cent expenditures incurred. However, they were verbally ordered by the secretary to stop releasing all the funds till further order, it has been learnt.

The government wants to rationalise the PSDP funds with an aim to revise it downward and is planning to impose cut on less important, unapproved and slow-moving projects.

The government is working on reducing federal development programme to about Rs775 billion from the Rs1,030 billion set in the budget 2018-19. This would provide about Rs250-255 billion or 25 per cent saving to the government.