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Budget 2016-17: Govt eyes big rise in tax revenues

Pakistan wasn't able to achieve its tax collection targets in the last 3 years. Pakistan tax collection as % to GDP was recorded less in 2015-16 compare to 2014-15 than how we are going to collect 3.95 trillion rupees this year?

Khwab De Ke Jhoote Moote
Batiya Banaye Kaise
Sajna Anari Baiman
 
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ISLAMABAD: Pakistan is targeting a near 16 percent rise in tax revenues in the fiscal year ending June 2017, Finance Minister Ishaq Dar said on Friday as he unveiled a budget aimed at shoring up the country’s finances.

Dar said Pakistan would cut its fiscal deficit to 3.8 percent of gross domestic product for the coming financial year, down from the 4.3 percent envisaged for this year, and helped by a planned rise in tax collection to 3.95 trillion rupees.

Pakistan’s economy is growing at its quickest rate in eight years after a slide in oil prices and expansion in industry and services boosted demand.

Investor confidence has slowly returned to a country that was battered by the global financial crisis.

“The dangers to the economy are now far behind us. Economic growth has hit an eight year high. This would have been even better if it had not been for a 28 percent fall in the cotton crop,” Dar told parliament.

Still, the economy remains structurally weak, hamstrung by poor infrastructure, struggling exports, the threat of militant violence and a very narrow tax base.

The GDP growth rate of 4.7 percent in the year to June 2016 was less than the government’s 5.5 percent target, and a contraction in the agricultural sector this year meant many Pakistanis do not feel much better off.

Pakistan’s economy needs to grow at more than 6-percent per annum to absorb new entrants coming into the workforce, experts say.

Dar said Prime Minister Nawaz Sharif’s government’s priority in the year ahead was to push Pakistan’s persistently low tax-to-GDP ratio to above 10 percent and raise taxation revenues.

Pakistan’s financial year runs from July to June.

Khurram Husain, a Karachi-based analyst, said the government was proposing to raise taxes on turnover and financial transactions, which could hurt economic activity. It had largely left income and consumption taxes alone, he said.

“I see it more as a fire-fighting budget. The government is having a very hard time transiting out of fire-fighting mode into producing a growth-inducing budget. And this budget speech appears to confirm that,” Husain said.

Successive governments have promised to rein in tax evaders and boost revenues but face fierce resistance to change, including from the many politicians and businessmen believed to be among those dodging their taxes.

‘On path to progress’

Dar told a specially convened budget session that the country is moving ahead towards progress and prosperity.

“Economic indicators reflect our performance,” Dar said. “I am thankful to Allah that we are given an opportunity to present budget for fourth time. Our each budget was better than the previous ones.”

“We have successfully managed to put Pakistan on the right track.”

Dar unveiled Rs4.39 trillion budget for the next fiscal year. In his speech in the parliament, he presented a review of government’s performance over the last three years during which he said the country achieved economic stability.

“While on the path to economic prosperity, the government has managed to put inflation in check,” he said.

Revealing his government’s performance on the economic front, Dar said tax collection stood at record high. However, exports showed a major decline, but for the finance minister, it was mainly due to a global downward trend for commodity prices that should be blamed.

“Inflation at 2.82pc is lowest in last 10 years,” Dar told the House, adding that the fiscal deficit was brought down to 4.3pc. “By the end of June, we expect to meet our tax revenue targets…tax collection grew by 60pc in last three years,” he said.

The government’s tax revenue target is Rs3104 billions.

The finance minister termed investment in the energy sector as one of the top priorities of his government. He said to meet the country’s power requirements the government undertook several power-generating projects.

“Load-shedding is now taking place under a proper system,” he said.

Moreover, Dar said pension of federal government employees would be increased by 10 percent while employees over 85 years of age would get 25 percent raise in pensions.

The finance minister also announced 50 percent increase in conveyance allowance for grade 1-5 employees. He expressed hope to bring down bring down fiscal deficit to 3.8pc by next year.

Defence budget increased by 11pc

Finance Minister Dar informed parliament that the country would provide 860 billion rupees to the armed forces during the 2016-17 financial year.

“The defence budget has been increased to 860 billion rupees which is 11 per cent more than the last year,” he said.

Pakistan also increased its defence budget by 11 percent in 2015-16.

The country has been fighting a homegrown insurgency for over a decade, with heavy deployments of troops in the border area near Afghanistan where militants have previously operated with impunity.

However security was significantly improved in 2015, which saw the least number of attacks since the Tehreek-e-Taliban were formed in 2007.

The government will also maintain a 100 billion rupee grant for the rehabilitation of thousands of families who have been forced from their homes by the insurgency and military operations to uproot the militants from the country’s northern areas.

Pakistan estimates it has lost more than 50,000 people and billions of dollars in revenue due to the ongoing war against extremism, while thousands of its families have been rendered homeless.

— Additional reporting by AFP/Reuters

THIS IS PATHETIC, ABSOLUTELY PATHETIC.

THEY SHOULD HAVE AIMED FOR AT LEAST 8% GDP. THE CURRENT ENVISAGED 5.7% IS NOTHING. IT IS ONLY TO COVER THE CORRUPTION AND TO PROVIDE SAFE PASSAGE TO WEALTHY NON-TAXPAYERS.

2% CAN BE EASILY ADDED IN GDP IF THE GOVT. CAN CUT THE CORRUPTION BY 50%.

ANOTHER 1% CAN BE ADDED BY IMPROVING THE JUDICIAL SYSTEM, LAW & ORDER & PROVIDING SAFETY TO INVESTORS.

FURTHER GROWTH CAN BE ACHIEVED BY INCREASING THE TAX REVENUES BY BRINGING THE WEALTHY INTO THE TAX NET.

BUT PMLn WILL NOT DO ALL THIS.
 
What is the allocation amount and percentage for education?
 
Pakistan wasn't able to achieve its tax collection targets in the last 3 years. Pakistan tax collection as % to GDP was recorded less in 2015-16 compare to 2014-15 than how we are going to collect 3.95 trillion rupees this year?

Khwab De Ke Jhoote Moote
Batiya Banaye Kaise
Sajna Anari Baiman


Where did you read this?
Please do some research before commenting..

This year target is achieved ( 32trillion) which was 20 % higher then previous year...

We may not like pmln .... but give the devil its due.... tax collection was 18 trillion when they came office ....
 
Where did you read this?
Please do some research before commenting..

This year target is achieved ( 32trillion) which was 20 % higher then previous year...

We may not like pmln .... but give the devil its due.... tax collection was 18 trillion when they came office ....

Go and read your leaders economic survey.
 
Where did you read this?
Please do some research before commenting..

This year target is achieved ( 32trillion) which was 20 % higher then previous year...

We may not like pmln .... but give the devil its due.... tax collection was 18 trillion when they came office ....

Here you go

http://arynews.tv/en/pakistan-economic-survey-2015-16-shows-growth-target-missed/

Check the tax revenue section and if still you don't believe it than go and see what Finance minister said in his speech.
Its better to verify before quoting someone.

And one thing for your information FM promised to collect 12.5% tax which leads to 3.4 trillion and you yourself stated that 3.2 trillion was collected which is also a false statement by the way.

The leader u have in your profile pic is a liar and foul mouthed ba$tard .....

Your post is reported and don't you dare to abuse here. My leader is a worldwide recognized genius not an unknown one who is trolling here like you.
 
Thanks for reporting ....

Thats what i feel about him.....honestly....and genoius my foot.... he should own up terion his illigitimate daughter before trying to own the country ....

Tax collection target this year is achieved.... the fogure in your link (ary news) is for 10 months not 12.... typical for pakistani media...
 
Budget main aik cheez pe hairat hay k train , roads aur bridges ka budget taleem aur health say zayada hay. Mere khayal main yeah loag awam ko mazdoor banana chahtay hain :mad: .
 
Let's take a common man's view of how our country is performing sans all the glitter and gold that Mr. Dar tells us that Pakistan economy is producing under his able tutelage.

I am a commoner and this is how I see the current budget of Pakistan presented by Economics Whiz Kid who is a beacon of hope for entire Ummah as recently suggested by N$ on his Skyped cabinet meeting only few kms away from his palatial abodes.

Information gleaned from PMLN’s Govt’s Finance Ministry “speaks volumes” for the data integrity but for discussion’s sake let’s decipher the officially reported numbers (source: Economic Survey) covering aspects which a common Pakistani like me can understand:

GDP (Gross Domestic Product)

Pakistan 4.7% Actual vs. 5.5% Target (Underperformed by 0.8% - Target Missed by 15%)

Let’s see how our neighbors performed:

India 7.5%, Bangladesh 6.6%, and Sri Lanka 5.0%

Production sectors

Agriculture: Overall negative growth -0.04 percentage points

Industry: Improved 1.4 percentage points

Services: Contributed 3.35 percentage or 70% + to overall GDP

What contributed in Services Sector is due to higher government spending on Salaries, Pension, and Defence. If you were thinking major push has come from creation of jobs or businesses then think again – we are fixated on conspicuous economy and it is this revolutionary Govt’s fourth Budget 

FDI – Foreign Direct Investment

Target was $3.34 Billion and this Govt., achieved $1.0 Billion (Target missed by whopping 70%)

There had been virtually no plan of current Govt., in last four years, to attract FDI; if they were hoping in Agri based products then one can see; and also it is way more than Lahore – Islamabad Motorway.

If anything; Pakistan dropped by another two points in 2015 on the World Bank’s ease of Doing Business Index from 136 to 138 out of 189 countries. Such a illustrious achievement of “Experienced” team that N$ boasted about in 2012.

And how can they achieve $150 Billion exports as outlined in Vision 2025 – Would this Govt., be able to achieve 24% annual growth in Exports all along – claptrap redefined!

Now let’s see Exports:

Falling – falling and falling continuously

Exports have been contracting each month for the last 18 months.

Period July 2015 to March 2016 $15.6 billion

Period July 2014 to March 2015 $17.9 billion.

Decline of 12.9%. So much for experienced team that N$ touted as consisting of whiz kids.

Not only this; but perhaps this is also a unique achievement of “Experienced Geniuses" of N$ team that perhaps for first time in the history of the country the exports would be lower at the end of any government’s tenure than what it inherited from much disclaimed Govt., of PPP. What an accolade to have by experienced team of economics gurus!

What steps were taken by this government to increase exports in the period when Bangladesh has become 2nd biggest exporter of textiles after China. And Faisalabad is doing just fine; in the able hands of geniuses like Abid Sher Ali, Talal Chaudhry and Rana Sanullah – ok that was a swipe one has to take when spokesmen of Govt., are such beacons of accomplished and not to forget experienced leadership!

Revenue Collection:

Overall growth is 18.9% during July 2015 to April 2016 when compared to same period last year.

How: Growth in collection of indirect taxes (21.7%) was almost 50% more than the rate for direct taxes (14.4%) is something which only an accountant can suggest not an economist. Another bravo for experienced team, basically this means that keep on squeezing out from end users pockets.

As is well established, indirect taxes such as customs duty, which showed the highest growth of 32.5% during the current financial year, adversely affect the poor disproportionately and increase inequality in a society furthering the gap between haves and have nots as briefly touched upon in the thread opened by Jolie re What is Democracy?.

Not only that; but when you raise reliance on customs duty it will naturally isolate Pakistan and obviously it is anti-export bias, thus making it extremely difficult for it to be part of the global value chain like other fast developing countries such as Vietnam, Bangladesh, Sri Lanka, and so many more.

Can Mr. Ishaq Dar self proclaimed whiz kid of Economics and supposedly Pride of Entire Ummah as touted by N$ from his mansion in London tell us how has Pakistan fared on the following indices such as those of World bank in last three illustrious years?

1. Ease of Doing Business

2. Trading Across Borders

3. Human Development Index (refer to earlier thread by myself)

4. Transparency

In current world; every department in a small private business benchmarks against competitor to see how they are performing but in our “democracy” only illicit practices of electoral fraud and once in five year exercise of “voting” is enough to tell the common man – Sab Set Hai – Army hamari dushman hai warna tou hum ney Switzerland ko bhi beat kar dena tha.

Well Done N$ – and your “experienced” team consisting of geniuses for another twaddle!

I will definitely again vote for your party in 2018 (Maryam Safdar) and 2023 (Maryam Safdar) and 2028 (Mehrun Nisa Safdar) and so on and so forth........
 
Fair criticism....

Let the govt complete 5 years ...and dont try to sneak into power...let the system run...if they donot perform ... they will b boated out like ppp was....

But no....we are going to see another failed dharna debacle after eid....

Ptians dont realise who is their friend and who is their enemy....

They think ppp will support them against corruption..... thats the joke of the century
 
I think this is another Noora League thread funded by Maryam Nawaz media cell and of course your tax money.

Every year budget is a revolutionary budget presented by Sharif family munshi. the problem is revolution is just does not happen. When you have money launderers, loan defaulters and tax thieves as your political representatives, no wonder Pakistan is going nowhere but down.

Thanks for reporting ....

Thats what i feel about him.....honestly....and genoius my foot.... he should own up terion his illigitimate daughter before trying to own the country ....

Tax collection target this year is achieved.... the fogure in your link (ary news) is for 10 months not 12.... typical for pakistani media...

He may not be genius but all Noora leadership combined is not half this man. He has achieved so much and given the country back so much.

Tell me a hospital where your leaders can go get even a basic medical check up? This after 6th term in Punjab and 3rd in the centre.

Why you NooniToons bring Imran or PTI in every criticism of your party's performance. People here are making very fair points. If you cant take criticism then go to London where all your properties made from stolen money are.
 
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