Its quite enigmatic

The government has unveiled its sixth budget, promising relief measures in taxes, higher spending on subsides and increase in salaries for government employees as it heads into general election amid protest, uproar and walkout by the members of opposition parties - Pakistan Peoples Party, Pakistan Tehreek-e-Insaf (PTI) and Jamaat-e-Islami.
Finance Minister Miftah Ismail, who was administered oath of minister for presentation of budget, extolled the government''''s performance of last five years and stated the country is projected to touch 13 years highest growth rate of 5.8 percent and inflation, the biggest tax on the poor, was reduced to 5 percent from 12 percent and revived investors'''' confidence in the country by tacking head on the energy challenge and law and order situation.
Ismail said the Economic Relief Package announced by the Prime Minister recently offered historic reduction in income tax rate for individuals and those earning Rs 1.2 million per annum do not need to pay tax while those having Rs 2.4 million annual income need to pay 5 percent, above Rs 200,000 per month 10 percent and above Rs 400,000 monthly earners will be required to pay 15 percent tax. The minister said that as the middle and working class, which has been heavily burdened, is being proposed historic relief in budget for the next fiscal year through reduction in tax rate. However, he said those who are not paying taxes will be tracked by data mining. The minister said that those having undeclared assets and income are being provided last opportunity to whiten their assets and income by paying 5 percent tax and stated that from July 1, 2018 onward, only filers will be able to deposit dollars in their foreign currency accounts and non-filers will be unable to buy property above Rs 4 million after the end of the current fiscal year.
The minister said that increase in spending and decrease in fiscal deficit will be achieved by Federal Board of Revenue (FBR) resource mobilization of Rs 4435 billion and rationalization of expenditure.
The finance minister announced an expenditure of Rs 5.246 trillion for the next fiscal year - 8 percent higher over Rs 4.857 trillion for the current fiscal year - with total revenue forecast at Rs 5.661 trillion and growth target of Rs 6.25 percent. Provincial governments'''' share is projected at Rs 2590 billion for the next fiscal year as opposed to Rs 2316 billion for the current fiscal year, higher by 11.8 percent, which leaves net revenue of the federal government after provincial transfer at Rs 3.070 billion as compared to revised estimates of Rs 2676 billion for the current fiscal year. Interest payment for the next fiscal year is projected at Rs 1620 billion and defence budget at Rs 1.1 trillion with 9.18 percent increase over revised projection of Rs 999 billion for the current fiscal year. Provincial surplus is projected at Rs 286 billion for the next fiscal year and fiscal deficit at 4.9 percent.
Federal Public Sector Development Program (PSDP) is proposed at Rs 1030 billion with Rs 138 billion investment for power sector, Rs 39 billion for Railways, Rs 33 billion for Higher Education, Rs 10 billion for Prime Minister Package for Youth while Rs 179 billion have been earmarked for subsidies, 26 percent higher over previous year Rs 138.846 billion and Rs 125 billion are set aside for Benazir Income Support Program. The government has also proposed Rs 310 billion for transport and communication projects while Rs 137 billion have been proposed for development of Gwadar Port.
The minister claimed that the government has added 12,230MW electricity to the national grid during the last five years and more projects are online for cheaper power generation through hydel, coal and RLNG.
The GDP growth target of 6.2 percent has been set for the next fiscal year, inflation below 6 percent, tax to GDP ratio 13.8 percent and public debt is projected to be brought down to 63.2 percent and foreign exchange reserves will be jacked up to $15 billion while protection to social sector will continue.
The government also proposed a 10 percent ad hoc relief allowance to civil and armed forces employees from July1, 2018 as well as proposed 10 percent increase for pensioners across the board, 50 percent increase in house rent/ ceiling. The government also proposed increase in minimum pension to Rs 10,000 from the present Rs 6,000, family pension to Rs 7,500 from Rs 4,500 and minimum pension of pensioners above the age of 75 is proposed at Rs 15,000. Overtime allowance of staff car drivers and dispatch riders was doubled and also proposed an allocation of Rs 12 billion for provision of advances to government servants for house-building and purchase of transport facility and set aside an allocation of Rs 5 billion for senior officers'''' Performance Allowance.
Sales tax on urea has been proposed to be reduced to 2 percent while on agriculture machinery sales tax is proposed 5 percent from 7 percent and an agriculture support will also be established with Rs 5 billion for research and seeds, and another fund, agriculture technology fund, is also being proposed.
He said that zero-rating regimes on five export sectors will continue, mark-up on lower rate will continue on long-term finance facility and export refinance facility, and a big package for exports will also be announced.
The minister while announcing relief measures in taxes said that FBR notified rates for property transactions are proposed to be abolished and provinces are also supposed to do so and phase-wise reduction in super tax as well as tax on undistributed profit has been proposed to be reduced to 5 percent from 7.5 percent. The minister said the government has proposed removal of tax on bonus shares, rationalization of tax on import of coal and reduction in WHT tax on banking transaction from 0.6 percent to 0.4 percent for non-filers as well as exemption in sales tax. However, additional customs duty was proposed to be increased from 1 percent to 2 percent.
The minister also promised to overcome the challenge of stagnant growth by 2020. The minister also stated that the federal government will set up a desalination plant to make use of seawater for drinking purpose for the people of Karachi and Rs 5 billion have been allocated in next budget for Karachi package of Rs 25 billion announced by the Prime Minister and Rs 8 billion have been earmarked by Ministry of Planning and Development for Karachi export centre.
Earlier, soon after the session was started, Opposition Leader in National Assembly Syed Khurshid Shah and PTI Parliamentary Leader Shah Mehmood Qureshi accused the government of undermining the supremacy of the Parliament by allowing for the first time an unelected person to present budget, asking the government, "Do not you have even a single competent person among the elected members of the party for presenting the budget?"
Khurshid Shah urged the Prime Minister either minister of state for finance or he himself (the prime minister) should present the budget rather than getting the job done by an unelected person. He said that it is irony that on one hand the PML-N Quaid Nawaz Sharif is building a narrative for sanctity of vote while on the other his party''''s government is compromising his narrative by presenting budget through an unelected person.
Reuters adds: But a widening current account deficit and dwindling foreign currency reserves have taken some shine off the economic outlook, with the World Bank and the International Monetary Fund (IMF) warning of risks to the economy.
Ismail said the budget deficit would hit 5.5 percent for the current fiscal year, missing the government''''s fiscal deficit target of 4.1 percent. He forecast the budget deficit at 4.9 percent of GDP in 2018/2019.
A government document put the total budget outlay for 2018/2019 at 5.9 trillion Pakistani rupees ($51.06 billion).
"A VERY BIG SUCCESS" Ismail said tax revenues reached 13.2 percent of GDP in 2017/2018, up from 10.1 percent in 2012/2013. "This unusual increase in tax collection is a very big success," Ismail said. A budget document said total tax receipts would reach 4.2 trillion for 2017/2018 - barely missing the official target - and Ismail projected they would jump to 4.43 trillion rupees next fiscal year.
Ismail also set aside 1.1 trillion for the defence budget, increasing it by about 20 percent from the 920 million that the government had budgeted for the military to spend. Revised figures from a budget document suggest military spending will hit 1 trillion this year anyway.
The United States has announced a suspension of military assistance to Pakistan totalling about $2 billion, though it was not clear whether this was why Pakistan''''s military budget exceeded its planned outlay.
Washington suspended the assistance due to claims that Islamabad was either assisting or turning a blind eye to Islamist militants who use Pakistan''''s soil as a launchpad for attacks in Afghanistan.
The huge boost to defence spending comes at a time of fraught relations between the ruling party and the powerful military, which has ruled Pakistan for nearly half its history.
Senior PML-N officials have suggested that elements of the military establishment are trying to weaken the party before the polls. The military has denied interfering in politics.