ISLAMABAD: The government may fix the country’s GDP growth at 6.2 percent and budget deficit at 4 percent for the next financial year 2017-18.
“The broad contours of the budget are almost ready, which will be presented to the federal cabinet for approval after the return of Finance Minister Ishaq Dar from the United States,” said an official of the Ministry of Finance.
The government would set Federal Board of Revenue (FBR)’s tax collection target at Rs4 trillion, which would be almost Rs400 billion higher than the target of the current fiscal year. The government had kept tax collection target at Rs3,621 billion for the year 2016-17. However, it expects to collect around Rs3,500 billion after FBR faced mammoth shortfall of Rs168 billion during nine months (July-March) due to lower taxes on oil products and incentive packages for export oriented sectors.
Sharing some of the initial estimates, he said that the government is considering fixing economic growth target at 6 or 6.2 percent for the upcoming fiscal year as against 5.7 percent target of the ongoing year. Similarly, the government is contemplating to fix budget deficit at 4 percent of the GDP (Rs1.44 trillion) as against revised target of 4.1 percent of the GDP of the outgoing year.
Meanwhile, the FBR has also made some of the taxation proposals for the next year. The government would target non-tax filers in the budget to broaden the tax base of the country. The government would enhance the withholding taxes (WHTs) for non-filers of income tax returns in the next fiscal year. The FBR has also proposed to enhance the withholding tax on banking transactions from 0.4 percent to 0.6 percent in the budget. Similarly, the government is expected to exempt withholding tax for up to Rs100,000 transactions in the next budget. Currently, withholding tax is imposed on over Rs 50,000 bank transactions.
