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Thursday, June 13, 2024  
06 Dhul-Hijjah 1445  

Defence spending, govt salaries to go up in Rs18 trillion budget

Government aims to collect Rs12.9 trillion in tax revenue

The federal government is set to present a federal budget worth Rs18 trillion rupees to the National Assembly today, with a focus on bolstering defense spending, introducing new taxes, and reforming the pension system.

The budget is expected to include a 10-15% increase in salaries for government employees. A significant portion of the budget, Rs2.1 trillion rupees, will be allocated to defense.

The budget document reveals a projected Rs9.5 trillion for interest and debt payments, while non-tax revenue is estimated at an initial figure.

The government is expected to introduce new taxes and increase the tax burden by eliminating sales tax exemptions. Proposed increases in sales tax on various goods, withholding tax, and customs duties are anticipated.

The government aims to collect Rs12.9 trillion in tax revenue. To achieve this, the budget proposes a 5% sales tax on petroleum products, a 1% increase in GST, and the elimination of unnecessary tax breaks, among other measures. This is expected to generate an additional Rs2 trillion in revenue.

The budget projects over Rs1050 billion in revenue from petroleum levies. The elimination of unnecessary sales tax exemptions is expected to generate an additional 5.5 trillion rupees in revenue.

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The budget proposes imposing sales tax on agricultural goods, seeds, fertilizers, tractors, and other equipment. A 10% sales tax on food, medicines, and stationery is also being considered. The budget allocates Rs800 billion for subsidies in the energy sector.

Pension reforms are proposed, including the introduction of a voluntary contributory pension system for new recruits. Retired employees are expected to receive pensions for 20 years instead of lifetime benefits.

The duration of family pensions is proposed to be reduced to 10-15 years, while the daughter’s pension is set to be eliminated, and commutation benefits are expected to be reduced.

The budget allocates Rs827 billion for infrastructure, Rs253 billion for energy, Rs279 billion for transport and communication, Rs206 billion for water projects, Rs280 billion for the social sector, and Rs45 billion for healthcare.

The budget also allocates Rs93 billion for education and higher education, Rs75 billion rupees for SDGs, Rs42 billion for agriculture, Rs28 billion for governance, Rs79 billion rupees for science and IT, Rs64 billion for merged districts in Khyber Pakhtunkhwa, and Rs75 billion for Azad Kashmir and Gilgit-Baltistan.

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Muhammad Aurangzeb

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