The government is expected to present Finance Amendment Bill in Parliament consisting of measures to expand the tax base and squeeze the space for non-filers. Sources said that marathon meetings have been ongoing in Finance Ministry to firm up revenues measures and cut expenditure as part of the austerity plan announced by the Prime Minister.
Finance Amendment Bill may withdraw/reduce income tax relief provided to salaried class, increase incidence of Federal Excise Duty (FED) on a few commodities including cigarettes and take additional measures to expand the tax base.
There is speculation that the government may increase customs duty from 2 to 3 percent on imports across the board to generate Rs25-28 billion. The measure would impact on 7200 customs tariff lines.
The government may also adjust regulatory duties to curb imports and reduce the trade deficit. An official told Business Recorder that Secretary Finance has been holding meetings with officials of Federal Board of Revenue (FBR) and Commerce Ministry to identify revenue measures and with other ministries to save expenditure.
A significant slash is anticipated in the development outlay for the current fiscal year (up to Rs 250 billion in development expenditure) in view of the unsustainable budget deficit, the official stated adding that the primary focus for the past two weeks has been to identify revenue mobilizing areas, and saving expenditure.
The amended bill may be presented on the first day the assembly next meets as these problems are exacerbating every day and need to be dealt with promptly.
The government plans to include its own priority projects in the public sector development programme and focus on social sectors instead of infrastructure namely on water, health and education projects as well as those under the umbrella of China-Pakistan Economic Corridor (CPEC).