Federal Finance Minister Dr Abdul Hafeez Shaikh on Saturday indicated that the government was not contemplating to cut the defence budget for the upcoming fiscal year 2011-12 due to enhanced defence needs in the fast changing geopolitical situation in the region.
“Despite growing fiscal pressures, there is no longer any possibility to cut military expenditure given a tough security situation in the country and the region”, the minister said while addressing a press conference at SBP Bank House Karachi yesterday.
He said Pakistan’s budget for the fiscal year 2011-12 is expected to be announced on June 3. Earlier, the budget was scheduled for May 28.
Hafeez Shaikh predicted that the country’s economic growth for the upcoming fiscal year is likely to range between 2.5 and 3 per cent. He said that the exports could cross $24 billion mark while workers’ remittances are expected to increase to Rs11 billion by the end of current fiscal year.
“The government is making all out efforts to maintain macroeconomic stability by taking some important measures like encouraging and strengthening of the private sector for creating employment opportunities in the country,” he said, adding that the government will improve the effectiveness of social safety nets by increasing public funding in the coming fiscal year.
APP adds: Hafeez Shaikh said that government will not burden the existing tax-payers, and instead identify new assessees in the forthcoming budget. He said the Federal Board of Revenue (FBR) has identified 700,000 rich people, who are enjoying a luxurious life but not paying tax. He said 55,000 out of total identified wealthy people, have been issued notices to pay taxes as they have cars, big houses and are enjoying foreign tours.
The Minister pointed out that the general sales tax regime is being further reformed to increase revenue and become self-sufficient in revenue generation to fund development projects and facilitate the people.
“We are trying to enhance our own revenue resource base instead of relying on foreign assistance”, he added.
Similarly, he said that zero rating has been withdrawn from various sectors and the government is trying to bring in more sectors in the tax net without any discrimination.
He said that government has been identifying non income group for cash transfer through Benazir Income Support Fund, Pakistan Poverty Alleviation Fund and Baitul Maal.Dr Hafeez Shaikh said the government has drastically cut its expenses to reduce budget deficit and reach the target of 4.5 per cent for the current fiscal year.
However, the unprecedented floods followed by the high oil prices have affected the efforts for cutting budget deficit and it is contained at around 5.5 per cent, he noted.
He said the purpose of the coming budget is to bring in stability in the economy, reduce government role in job creation, further increase exports, address energy crisis by sorting out circular debt issue and tight budget of public sector enterprises.
Responding to a question about cut in defence budget, he said that during the current situation in the region, there was a need to further strength defence of the country. However, there will be a balance in this regard, he added.
The Finance Minister said that the national budget 2011-12 will be announced on June 3.
He said State Bank of Pakistan (SBP) has been provided full autonomy in an effort to strengthen institutions in the country.
He said government was not borrowing from SBP because it will further push up inflation.
Replying to a question, he said the country is likely to get a tax revenue of Rs 1.580 trillion this year.
He said the Finance Ministry is consulting all the stakeholders in the country to get their input and prepare a practical, realistic and transparent national budget which reflects the aspirations of the people.
A wider consultation process involving parliamentary groups, businessmen, trade bodies, academia, economic and taxation experts, has been devised this year and this process will continue, he said.
In addition, the government has constituted Revenue Advisory Council, Economic Advisory Council and their sub committees to gather input and recommend proposals on budget.
Talking of economic achievements, he said that rate of growth (GDP) remained between 2.5 to 3 per cent this year, while external sector did well, where exports recorded a historical growth of 28 per cent and expected to cross the highest ever mark of $ 24 billion this year.
Similarly, home remittances will cross $ 11 billion mark this year as foreign exchange reserves crossed $ 17 billion figure, he added.
He said provinces have received an additional Rs 300 to Rs 330 billion under NFC Award this year to build roads, water supply scheme, policing to improve social indicators.
“Despite growing fiscal pressures, there is no longer any possibility to cut military expenditure given a tough security situation in the country and the region”, the minister said while addressing a press conference at SBP Bank House Karachi yesterday.
He said Pakistan’s budget for the fiscal year 2011-12 is expected to be announced on June 3. Earlier, the budget was scheduled for May 28.
Hafeez Shaikh predicted that the country’s economic growth for the upcoming fiscal year is likely to range between 2.5 and 3 per cent. He said that the exports could cross $24 billion mark while workers’ remittances are expected to increase to Rs11 billion by the end of current fiscal year.
“The government is making all out efforts to maintain macroeconomic stability by taking some important measures like encouraging and strengthening of the private sector for creating employment opportunities in the country,” he said, adding that the government will improve the effectiveness of social safety nets by increasing public funding in the coming fiscal year.
APP adds: Hafeez Shaikh said that government will not burden the existing tax-payers, and instead identify new assessees in the forthcoming budget. He said the Federal Board of Revenue (FBR) has identified 700,000 rich people, who are enjoying a luxurious life but not paying tax. He said 55,000 out of total identified wealthy people, have been issued notices to pay taxes as they have cars, big houses and are enjoying foreign tours.
The Minister pointed out that the general sales tax regime is being further reformed to increase revenue and become self-sufficient in revenue generation to fund development projects and facilitate the people.
“We are trying to enhance our own revenue resource base instead of relying on foreign assistance”, he added.
Similarly, he said that zero rating has been withdrawn from various sectors and the government is trying to bring in more sectors in the tax net without any discrimination.
He said that government has been identifying non income group for cash transfer through Benazir Income Support Fund, Pakistan Poverty Alleviation Fund and Baitul Maal.Dr Hafeez Shaikh said the government has drastically cut its expenses to reduce budget deficit and reach the target of 4.5 per cent for the current fiscal year.
However, the unprecedented floods followed by the high oil prices have affected the efforts for cutting budget deficit and it is contained at around 5.5 per cent, he noted.
He said the purpose of the coming budget is to bring in stability in the economy, reduce government role in job creation, further increase exports, address energy crisis by sorting out circular debt issue and tight budget of public sector enterprises.
Responding to a question about cut in defence budget, he said that during the current situation in the region, there was a need to further strength defence of the country. However, there will be a balance in this regard, he added.
The Finance Minister said that the national budget 2011-12 will be announced on June 3.
He said State Bank of Pakistan (SBP) has been provided full autonomy in an effort to strengthen institutions in the country.
He said government was not borrowing from SBP because it will further push up inflation.
Replying to a question, he said the country is likely to get a tax revenue of Rs 1.580 trillion this year.
He said the Finance Ministry is consulting all the stakeholders in the country to get their input and prepare a practical, realistic and transparent national budget which reflects the aspirations of the people.
A wider consultation process involving parliamentary groups, businessmen, trade bodies, academia, economic and taxation experts, has been devised this year and this process will continue, he said.
In addition, the government has constituted Revenue Advisory Council, Economic Advisory Council and their sub committees to gather input and recommend proposals on budget.
Talking of economic achievements, he said that rate of growth (GDP) remained between 2.5 to 3 per cent this year, while external sector did well, where exports recorded a historical growth of 28 per cent and expected to cross the highest ever mark of $ 24 billion this year.
Similarly, home remittances will cross $ 11 billion mark this year as foreign exchange reserves crossed $ 17 billion figure, he added.
He said provinces have received an additional Rs 300 to Rs 330 billion under NFC Award this year to build roads, water supply scheme, policing to improve social indicators.
