Last update: Thu, 27 Oct 2016 11pm

Budgets: 2008-09


Finance Minister Syed Naveed Qamar, on Wednesday unveiled a Rs 2.01 trillion taxes-laden federal budget for 2008,09, with some relief for the poor and the salaried class people. In his budget speech in the National Assembly, the minister presented the details of budgetary measures to be taken in next fiscal year for a quick recovery of the ailing economy.
Pakistan on Wednesday hiked defence spending by close to seven percent to Rs 296 billion for the fiscal starting next month. The estimated allocation for 2008-09 budget compares to Rs 277 billion actual expenditure for the ongoing financial year ending on June 30. An amount of Rs 275 billion was originally earmarked for defence for the fiscal 2007-08.
The government has introduced an 'investment tax scheme' for legalisation of movable and immovable assets on payment of 2 percent of its value; new taxation system for builders and developers; 10 percent withholding tax on electricity bills exceeding Rs 20,000 per month; progressive tax rates on rental income and basic limit of exemption from income tax for salaried person has been increased from Rs 150,000 to Rs 180,000.
The budget for fiscal year 2008-09 envisages an allocation for Public Sector Development Programme (PSDP) which is higher than that proposed in the Annual Development Plan as prepared by the Planning Commission. This dichotomy is unprecedented and is surprising given the severe resource constraints that the country is operating within.
The government has envisaged 5.5 percent GDP growth for next fiscal year that would be contributed by 3.5 percent growth in agriculture, 6.1 percent manufacturing and 6.1 percent growth in services. Total investment of Rs 2638.8 billion would be required to achieve the projected growth target, which 17 percent higher to investment in 2007-08.
The federal government has fixed Rs 1.251 trillion revenue target for financial year 2008-09, which is Rs 35 billion higher as compared to the revised target of Rs 990 billion target of outgoing fiscal year. The Federal Board of Revenue (FBR) is expected to reach Rs 1 trillion mark by the end of current financial year.
The Federal Board of Revenue (FBR) has raised customs duty on import of around 300 non-essential and luxury items in 15 percent, 20 percent and 25 percent slabs of import duty to higher slabs of 30 percent and 35 percent respectively.