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‘Austerity’ budget 19-20 presented amid ruckus by the Opposition

Budget size to be Rs7,036 billion; federal revenue target set at Rs6,717bn, of which FBR taxes will be Rs5,550bn.
news desk

ISLAMABAD
The Pakistan Tehreek-e-Insaf (PTI) led federal government on Tuesday unveiled a Rs7,022 billion austerity budget for the fiscal year 2019-20, setting ambitious tax collection targets to stabilise a faltering economy.
The budget sets an ambitious Rs5,555bn target for the Federal Board of Revenue—a 25% increase or Rs1.12 trillion in additional taxes from the previous year.
The increased FBR revenue would be supported by a Rs346bn increase in direct and Rs773bn rise in indirect taxes from the previous budget, which would mean Rs407.7bn in additional sales tax revenue, Rs363bn increase in income tax collection, Rs265.5bn rise in customs duties, and a rise of Rs99bn in federal excise duties as compared to the previous year.
“A challenging target of Rs5,555bn FBR revenue collection will be combined with aggressive expenditure controls to reduce primary deficit to 0.6% of GDP,” said State Minister for Revenue Hammad Azhar presenting the budget in the National Assembly.
He said the ambitious increase in tax revenue would be combined with “unprecedented reduction in expenditure” by both the civil administration and the military to bridge the widening gap between the government’s revenue and expenses.
“We have slashed the civil budget by five percent while the military budget will remain the same,” he added as he announced the details of the plan.
“The financial year 2019-2020 will be a year for economic stability. We will make some tough decisions and will try to save the poor public from the effects of those tough decisions.”
The government says the budgetary proposals are focused on economic stability and sustainable growth, with an emphasis on austerity, revenue generation, and uplift of downtrodden segments of society.
The special budget session of the National Assembly was marred by protests from opposition parties, which accused the government of presenting a budget “dictated” by the International Monetary Fund.
The government has secured a provisional agreement for a $6bn bailout from the IMF, contingent on measures to cut a rising budget deficit.
Budget 2020: Headline figures
Headline figures for Budget 2020
Budget outlay to be Rs7,022bn — 30pc higher than last year
Federal revenues to be Rs6,717bn — 19pc higher than last year
FBR tax target set at Rs5,550bn
Tax to GDP ratio to be increased to 12.6pc
Rs3,255bn to be disbursed to provinces via the 7th NFC award — 32pc higher than last year
Net federal reserves to touch Rs3,462bn, 13pc higher than last year
Budget Deficit — Rs3,560bn
Provincial surplus budgeted at Rs423bn
Total fiscal deficit to clock in at Rs3,137bn — 7.1pc of GDP, compared to 7.2pc of GDP last year



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