ISLAMABAD: The federal cabinet has approved Budget Strategy Paper for the financial years 2018-19 to 2020-21.
Prime Minister Shahid Khaqan Abbasi chaired a meeting of the federal cabinet here at the PM Office.
“The premier emphasized that sustained income and revenue streams will benefit the country instead of obtaining loans,” said an official statement issued after the meeting.
“The Budget Strategy Paper was discussed at length by the cabinet and several cabinet members provided useful suggestions for incorporation in the upcoming budget proposals,” it said.
The Finance Division presented the Budget Strategy Paper for financial years 2018-19 and 2020-21 and briefed the meeting about macroeconomic indicators of current financial year.
“The secretary finance briefed that the Budget Strategy Paper for FY 2018-19 to 2020-21 is based on four broad targets: sustained growth momentum, ensuring fiscal consolidation, managing balance of payments and ensuring debt sustainability,” said the statement.
“The meeting was informed that the recently announced Economic Reforms Package including lowering tax rates, widening the tax base, real estate reforms, local amnesty and tightening of foreign exchange regime, will help increase revenues and reduce the deficit,” the statement said.
The cabinet approved budgetary papers with total outlay of Rs5,500 billion for budget 2018-19, where tax collection has been set at Rs4,500 billion.
It was informed that the recently announced Economic Reforms Package, including lowering tax rates, widening tax base, real estate reforms, local amnesty and tightening of foreign exchange regime, will help increase revenues and reduce deficit.
The Prime Minister emphasized that sustained income and revenue streams will benefit the country instead of obtaining loans.
According to details the target for non-tax revenue for the next fiscal year has been set at Rs1,050 billion.
The Public Sector Development Program (PSDP) is to see a cut of Rs251 billion with the total size to be Rs750 billion. Cut in expenditures will control fiscal deficit by 1 percent.
The budget for defence expenditures is set to increase by 8-10 percent with total defence outlay target of around Rs1,010 billion. The provinces will get Rs2,565 billion during the next fiscal year as their share in the federal budget.
The debt repayment during next fiscal year has been estimated at Rs1,550 billion. Further, the cabinet approved subsidy allocation of Rs230 billion, which will be given on around 100 items. The budget deficit for the next fiscal year has been targeted at Rs1,870 billion.
