ISLAMABAD: Finance Minister Senator Muhammad Aurangzeb has sought budget proposals for the Federal Budget 2025-26 from all the ministries by February 9, 2025 aimed at completing the consultation process as per schedule.
“The budget process for the FY 2025-26 has been put into motion. In a significant departure from the past convention of back-end loading of budget process, we have started it fairly earlier this time around and Finance Division has already issued Budget Call Circular to all Federal Secretaries/Principal Accounting Officers on January 9, 2025,” Finance Minister said, in a letter to all the Federal Ministers.
Federal Board of Revenue has also issued letters on January 8, 2025 to major stakeholders from public as well as private sector, inviting budget proposals related to tax revenue. The same have also been uploaded on websites of Finance Division and Federal Board of Revenue.
FY26 budget: Tax, non-tax revenue: 4 base categories identified
Finance Minister argued that the federal budget envisages the annual financial management as well as three year macroeconomic and fiscal framework for the country, adding that it also takes stock of the economic road map for economic stability and financial discipline. Therefore, a meaningful consultative process in a well-defined timeframe is believed to be an essential step towards achieving national economics well aligned with vision “Uraan, Pakistan”.
Finance Minister urged timely contribution in this budget making process by sharing Ministries proposals with the Finance Division and Federal Board of Revenue by February 9, 2025.
Each demand will have only one Principal Accounting Officer. Finance Division will issue performance –based budget to all the POAs and it is their mandate to allocate funds to various cost centres and heads of accounts with concurrence of Finance Division.
The AGP has been instructed not to authorize payments where budget provision does not exist under relevant head of account including employees-related expenditures. Instructions issued on December 4, 2020 may be adhered to.
The Finance Division has instructed the Ministries that Foreign Exchange (FE) budgeting aims to have a fair estimate outflow for streamlining the process of releases. According to the Finance Division, all Ministries/ Division/attached departments/subordinate officers/autonomous bodies and semi-autonomous bodies/PSESs of the Federal Government as well as provincial governments are required to provide FE budget estimates for FY 2025-26 on the prescribed formats.
The Federal Board of Revenue (FBR) its budget circular for the Income Tax, Sales Tax, Federal Excise Duty and ICT (tax on services) has sought following proposals: (i) broadening of tax base for a wider participation in revenue generation efforts; (ii) policy suggestions for bringing entire value chain of all businesses in GST regime; (iii) promoting progressive taxation by introducing various measures where incidence of tax is higher on affluent classes; (iv) phasing out of tax concessions and exemptions under all tax laws; (v) facilitation of taxpayers and ease of doing business by removal of redundancy and simplification of tax laws; (vi) measures to reduce tax arbitrage opportunities and infuse efficiency in economy by following neutrality principle in taxation; and (vii) removal of tax distortions, procedural lapses and anomalies.
The letter further states that in pursuit of leveraging the collective expertise and insights of all stakeholders to refine tax policies, proposals for the forthcoming Budget for the Fiscal Year 2025-26 be submitted.
The National Assembly Secretariat has directed Ministries and Divisions to submit their proposals for the Public Sector Development Plan (PSDP) for the financial year 2025-26, to obtain approval from the relevant Standing Committees.
In a communication to all ministries and Divisions, Joint Secretary Committees, drew attention to sub-rules (6) and (7) of Rule 201 of the Rules of Procedure and Conduct of Business in the National Assembly, 2007. These rules stipulate that: “(6) Each Standing Committee shall scrutinize and suggest amendments, if necessary, and recommend the Ministry’s Public Sector Development Programme for the next financial year before it is sent to the Ministry of Finance for inclusion in the Federal Budget.” According to the rules, each ministry must submit its budgetary proposals related to the PSDP for the upcoming financial year to the relevant Standing Committee by January 31 of the preceding financial year.
The Standing Committee is required to make its recommendations by March 1 of the preceding financial year. If no recommendations are made by March 1 the proposals are deemed to have been endorsed by the standing committee.
Copyright Business Recorder, 2025
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