KARACHI: An ‘economic watchdog’ has claimed that the government would increase the revenue target by Rs500 billion to Rs4 trillion, 13 per cent more than the current target.
According to Research of Arif Habib Limited on Pakistan Pre-Budget FY18, the revenue target likely to be set Rs500 billion higher, and this target could possibly be achieved through: Higher tax on non-filers, Imposition of duty on import of goods (including luxury items), Improved Tax collection infrastructure, Introduction of an Amnesty Scheme(most likely post budget) and Continuation of Super Tax with a possibility of extension on to high net worth individuals, should provide support in tax collection as was witnessed during both FY16 and FY17.
Current Expenditure is expected to be allocated at Rs4.35 trillion, a 13 percent growth Higher Federal PSDP in FY18 at Rs1,001 billion versus a budgeted Rs800 billion in FY17,up 25 percent YoY (total PSDP, including provincial, at around Rs2,113 billion versus Rs1,675 billion for FY17,up 26 percent YoY),along with allocation towards CPEC/power.
Defense budget is expected at Rs950 billion (2.6 percent of GDP), up 10.3 percent YoY.
Subsidies are expected to remain in line with FY17 budgeted amount of Rs141 billion, on the back of lower power but higher agri and other subsidies. Fiscal deficit is projected at Rs1.5 trillion (4.1 percent of GDP) compared to FY17 budgeted target of Rs1.2 trillion (3.8 percent of GDP).
Tax to GDP is also being targeted at 11.0 percent for FY18 compared to a revised 10.9 percent target for FY17. The research said that the Budget for FY18 is anticipated to be announced by the Finance Minister on Friday, 26th of May, 2017.
Compared to the prior year, the government is expected to continue its drive towards higher GDP growth (FY18B:6 percent) while juggling between fiscal prudence and obtaining popular vote for upcoming elections.
