ISLAMABAD - Spurning the demand of opposition parties to present a four-month financial plan, Pakistan Muslim League-Nawaz government is all set to present the sixth budget today with a total outlay of Rs 5.5 trillion for fiscal year 2018-19.

The PML-N would be the first government in the country’s history that would present the sixth budget in its five-year constitutional tenure. The government is presenting the budget one-month earlier, keeping in view the upcoming general elections and the holy month of Ramazan.

The opposition parties had asked the government to present a four-month budget, allowing the next government to give the remaining financial plan.

Adviser to Prime Minister on Finance Dr Miftah Ismail would likely to present the budget in the National Assembly before getting it approved from the federal cabinet.

The budget’s total outlay is around Rs 5.5 trillion with 5.3 percent of the GDP deficit. The government has allocated Rs 1.1 trillion for defence for the next fiscal year as against Rs 920 billion for the outgoing year.

Debt servicing has been estimated at Rs 1.607 trillion. The funds required for running the government affairs had been proposed at Rs 444 billion. A development programme of Rs 2.043 trillion, including Rs 1.03 trillion for the federal Public Sector Development Programme (PSDP) and Rs 1.013 trillion for provincial annual development plans, has been proposed in the next fiscal year budget.

The government has set a tax collection target of Rs 4,433 billion for the Federal Board of Revenue. The federal government would transfer Rs 2,550 billion to the provinces under the National Finance Commission (NFC) award. It is likely to allocate a subsidy of Rs 219 billion for the next fiscal year with Rs 119.400 billion earmarked for the power sector.

The government has projected export target of $ 27.3 billion for the next fiscal year and imports at $ 56.5 billion with a trade deficit of $ 29.2 billion. It has estimated 6.2 percent GDP growth for the next fiscal year based on a projection of 3.8 percent growth in agriculture sector, 7.6 percent in industry, 8.1 percent in large-scale manufacturing and 6.6 percent in the services sector. Inflation has been projected at 6 percent, investment at 17.2 percent of the GDP, national savings at 13.3 percent of the GDP and foreign savings at 3.8 percent of the GDP.

Sources at the Finance Ministry told The Nation that they would present in the federal cabinet a few options relating to the increase in salaries for public servants. The government may increase salaries and pensions by 15 to 20 percent, the sources said. Miftah had already said Prime Minister Shahid Khaqan Abbasi wanted a special package for civil servants and pensioners in the next budget.

The government is unlikely to go for a massive taxation in the upcoming budget that could burden the common man as well as the business community, keeping the general elections in view. However, it would tighten the noose around non-taxpayers to bring them into the tax net. The government is likely to increase the rates of withholding tax on non-filers in the budget. The non-filers are subjected to higher rates of withholding tax on different kinds of transactions. The government may increase the federal excise duty (FED) on certain items including cement, cigarettes and others as a revenue-generation measure.

The government gave a massive tax relief to income taxpayers a few weeks back. The prime minister had announced that a maximum rate of income tax was being reduced from the existing 30 percent to 15 percent from the start of the next fiscal year.

Under the economic reforms package, there would be a complete exemption of tax on annual income up to Rs 1.2 million. There would be five percent tax on income falling between Rs 1.2 to Rs 2.4 million annually. The government would charge 10 percent tax on an annual income between Rs 2.4 to Rs 4.8 million. A maximum of 15 percent would be imposed on the income above Rs 4.8 million per annum. This would add Rs 90 billion to the national kitty.

Govt to present sixth budget today