Pakistan Yearly Budgets till 2016-2017, Taxes in Pakistan

Pakistan Budget 2016-2017

Last updated on May 30, 2016
I wonder what is the benefit of such democratic governments who increase their income instead of providing relief to masses. Each year’s budget brings new prices and tax increases and more sufferings for the people.

Pakistan Yearly Budget 2015-16, Defence budget, Taxes in Pakistan

This page has record of Pakistan yearly budget 2015-16 since the year 2010. It describes Pakistan economy, annual taxes, defence budget & other figures reviews.

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PML-N government has presented its third Federal Budget of over Rs 4.3 trillion for Fiscal Year 2015-16 before the Parliament.
NI(U)T Fund Board has declared an interim cash dividend @ Rs. 4.25 per unit for unit holders of NI(U)T for the year ending on June 30, 2015. I wonder what we will get after deduction of 17.5 percent capital gain tax. KSE-100 index has stuck below 35,000 since February 2015. Six months ago, KSE-100 Index reached 35,055 level but never recovered since then.
Foreign Exchange Reserves in Pakistan have increased to 17,500 USD Million in June 2015. Well done Prime Minister Nawaz Sharif government. No doubt, PML-N government is good government manager and tax collector. However, they are not sympathetic to general people. Democratic government means people welfare Awami government. But now government is rich and people are poor. My income considerably decreased during PML-N government tenure. There were casual web services work from USA and UK but now it has decreased even less. Government should encourage foreign remittances.
In the first look, budget volume is very high of around 4.5 trillion rupees. For getting this huge money government need to extract money from people. Instead of raising salaries, government should decrease taxes so all Pakistani nation get benefit of budget measures.
The biggest flaw of the budget is tax dedication from all including eligible or non-eligible i.e. rich or poor. Unless poor people file tax returns, tax will be deducted from them. Tax on bank transfers will have negative effect on banking and relevant sectors like stock exchange.
Karachi Lahore Stock Exchange and investor’s disappointment over sharp yearly increase of taxes
Today I speak to my broker at LSE. He is very disappointed on increase of taxes. Tax is increased to 15 percent from previous 12.5 percent. He told that who will invest in Stock Exchange with 32 deduction (15 percent tax+ 5 percent broker commissions + 12.5 percent tax on dividend= 32.5). He told that businesses are earning very high income at places like Liberty market and Hall road Lahore and there is only 0.1 percent tax imposed on them. Leave aside big markets, I personally know many owners of common street grocery stores who have purchased or made many houses by their earnings by their shops. So why government is increasing rates instead of expanding tax base? However, some measures like compulsory divided and company listing exemption rage increase are positive measures.
During the Pakistan Federal Budget 2015-16, PML-N government Finance Minister Ishaq Dar described their free market growth as “Karachi Stock Exchange (KSE) Index stood at 19,916 on 11 May 2013, the day the elections, has now surged to around 34,000, showing an increase of 70%”.
Will this budget provide relief to common people or will it be budget full of taxes hitting common man? Whether opposition and business community will accept it or will stage protest for people or business rights? Wait and see what comes out of the bag.

Pakistan Budget 2014-2015 & Stock Exchange

Pakistan Budget 2014-15: Total: Rs 3.945 Trillion

Focused rich class for taxes. Increased tax base. Finished tax exemptions.
Public Sector Development Program (PSDP): Rs 1.17 trillion has been allocated (A biggest huge chunk is allocated to government and parliamentarians discretionary development funds.)
Big allocation for power sector: Rs.205 Billion
PM Low Cost Housing Scheme: Rs. 6 Billion Only
Remittances, which were recorded at $11.6 billion during Jul-Apr 2012-13, rose to $12.9 billion for the same period this year, showing an increase of 11.5%

Why strong Pakistan establishment favor tax collector Prime Minister?

Before elections, it was impression in many circle that PTI chairman Imran Khan is establishment favorite as he was know to emphasis wider tax collection. However, PM Nawaz Sharif and CM Shahbaz Sharif political experience developed better trust with these government forces. PM and his political team is not only more experienced but also composed of very rich class. As you know, money makes the mare go. Before elections, I surveyed my own and found that strong and well-settled Punjabi class was strongly favoring PM Nawaz Sharif. PM Nawaz Sharif break new records in tax collection and finished tax exemptions on low-income class e.g. imposed tax on saving certificates up to Rs. 150,000. Every minute millions of rupees of sales tax is collected on commodity sales in every street and corners of Pakistan. Where this huge money goes?

Here by my own experience I get less work and remittance when compared to previous year.
Price hike or inflation should not increase as subsidies on electricity and oil prices are retained rather oil prices have come down. If I been government in charge, I would not have levied any new taxes instead I will go for reducing corruption as it is believed that almost half of the development funds are embezzled, which is huge money, a big part of the budget. There are no measure to prevent corruption as you see large numbers of patwaris (land registrars) and other district government officials are millionaires or even billionaires. Similarly, corruption exist in almost every government departments.

I have always emphasized that budget measures should be concessional for all people of Pakistan including private people which are 90 percent of Pakistani population. Since salaried people prepare budget so they often get better concessions. I suggest not to increase salaries of government servants since it will further increase inflation and government expenditures. I suggest decreasing prices and providing subsidies on the necessaries of life which will benefit all people of Pakistan. Last day I learnt that WAPDA peon salary is Rs. 12,000 per month while sometimes we earn less than 10,000 rupees per month. Many private employees and school teachers take Rs. 3,000 to 10,000 per month salaries.

Percentage increase in salaries is very unjustified. For example a senior officer is taking salary of Rs. 150,000 and lower cadre clerk is taking salary of Rs. 15,000 then ten percent increase means that senior officer salary is increased Rs.15,000 and clerk salary is increased Rs. 1, 500 i.e. ten times less amount than an officer’s salary, who is already taking ten times higher salary.
Tax which effect both rich and poor include Withholding Tax. Tax on cash withdrawal is a form of advance taxation / Withholding Tax known to exist in Pakistan. This mode of tax collection is also called the presumptive tax regime.
Section 231 Enhanced advance tax rate of 0.5% of the amount of cash withdrawal has been prescribed for a non-filer, as against the general rate of 0.3% on cash withdrawals.
Finance Act 2014 https://www.pwc.com.pk/en/tax-memorandum/memorandumonfinanceact20142.pdf
While presenting its first budget in June last year, the PML-N government had increased the rate from 0.2% to 0.3%. Increasing tax rates every year or continuously is the most oppressive thing as it leads to continuous increase. It tells governments want to increase their revenue from the same people without doing anything.
Imran Khan who got breakthrough with the slogan of social justice never speak against oppressive taxes or taxes on the poor. This was the reason he was known as establishment favorite. However, he could not become people’s favorite by this approach. If he does politics on easing measures for the masses, he may get automatic success in elections.

Pakistan Federal Budget 2012-2013 Review

I am neutral person who is not getting any benefit from any political party so consider it very serious review of concerned citizen of Pakistan.
Pakistan Federal Budget 2012-13: I watched the budget during the freestyle wrestling among few members of government and opposition. Budget is disappointing for common people. There is no income generation solution, government support or program of provision of jobs. There is no plan of finishing electricity load-shedding. It is once again budget for 10 percent government employees who get 20 percent increase in salaries. What 90 percent private people do?
PPP government increased government employment salaries continuously each year during last 5 years. It is not PPP government but many other governments used this method. It is political bribe. I prove it how. Government employees already get 10 percent or more annual increments in order to cope with price hike. Secondly, government officers are already rich. Monthly salary of middle age grade 19 officer is around Rs. 150,000. It is so high salary given we live in only Rs. 10,000 per month. It is tradition to get establishment support to let political government going. Thirdly, large numbers of politicians and government employees are relatives.
It will be more than Rs. 150,000 if you calculate overall benefits including high salaries, free accommodation, free medical, free education free traveling and many other allowances. WAPDA employees even get free electricity. We pay every bill. I know how terrible is this to pay house rent, children school fee, medical bills and utility bills. We travel in hired Rickshaw or public transport. It is only government employees who can enjoy life. Yesterday I visited National Saving Centre and found it closed at 2:45 P.M. while there are two holidays a week. On average government employees work 6 hour a day and we work 12 hours a day still not able to earn even 7 times less than them. Where is justice? Our lives are miserable.
I tell you inside truth of the budget. It is the budget proposed, recommended or instructed by civil, military bureaucracy and establishment. PPP government is politically weak and facing strong opposition. So, they joined establishment by raising salaries of government officials by as high as 20 percent. Remember that bureaucracy or establishment is a force which provides protection to the political government and can easily topple government in case of dissatisfaction. Now establishment do not need any new puppet like me or Imran Khan to whom they thought to use as per their instructions, being new to the system.
Tax payers and government investors are far more important than government officials since they provide financing and support to government while officials take salaries from the government. It is era of partnership so government should provide financing and support to such people. My all savings money is invested with Pakistani government national saving scheme. Today we purchased Rs. 750 prize bonds from State Bank of Pakistan, Lahore. There were great crowed there taking and returning bonds probably due to upcoming Pakistan National Day and EID holidays.
The United States of America (USA) government has agreed to release $1.18 billion (i.e. around 112 Arab rupees: PKR 112,000,000,000) under Coalition Support Fund (CSF) for Pakistan on immediate basis. It is general concept that most of foreign aid money is spent on luxuries of government officials. It is huge amount needed by Pakistan but need of poor people of Pakistan is even greater. See how government of Pakistan will benefit Pakistani nation by this money.

Pakistan Federal Budget 2011-2012 neutral review

I am neutral person who is not getting any benefit from any political party so consider it very serious review of concerned citizen of Pakistan.
1-Government claim is not correct that it is budget of common people of Pakistan. Firstly government has made no efforts of reducing expenditures. Why such a huge budget of Rs 2767 billion is presented while providing huge Rs. 850 billion budget deficit. Why government collects such huge revenue on the cost of poor people of Pakistan for the luxuries of high officials. Everyone knows that how much corruption is made in government revenue. Then why to gather money for corruption of officials. In the the year 2001-2002 total budget was only Rs. 752 billion. Government has expanded its spendings almost four times in the span of last ten years. Why?
Pakistan budget 2.7 trillion rupees is only 121 times less than only super power USA 2011 budget of $3.8 trillion dollars. However, Pakistan is land of blackouts and dust. USA gives AID to many countries of the world while Pakistan takes AID from many countries of the world. On the other hand, you can see millions of newest model luxury vehicles and big bungalows in every city of Pakistan.
2- Only relief for common people is decrease of general sales tax by only one percent from 17 percent to 16 percent.
3- Increase of 15 percent salaries and other allowances is relief for government employees who constitutes only one percent of Pakistani populating of 180 million. However, government employees are strongest organized pressure group in Pakistan. As opposed to opposition claims that budget is prepared by IMF infect budget is prepared by high bureaucracy officials so they increased their salaries by themselves. I believe that relief should be provided to whole nation. Freelance private people are among the poorest people in the country.
4- Decrease in many types of duties may be good for many types of businesses and investments.

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Federal Budget 2010-2011 review: Hard for private poor people and small business

I have just watched the live Federal Budget 2010-2011 after resumption of electricity at 7.00 P.M. This budget is hard for private poor people and small business. It is disappointing for poor private people. People are committing suicides out of poverty. If I had been a Senator, I would have recommended 10,000 rupees allowance for each poor unemployed family, free medicines for all poor ill people and three Marla homes for every homeless family. Government can take 4,000 rupees rent for such homes and deliver homes to people in fifteen years time.
Government is imposing more taxes on the pressure of IMF. This budget is good for government employees whose salaries have been increased by 50 percent. Thus government has made a successful attempt to win the sympathies of government employee. Here government ignored the private employees and private freelance workers who are far more poor than government employees. Thus government failed to provide any relief to those underprivileged people who remained deprive of government jobs. So it looks that this budget is prepared by bureaucracy and endorsed by federal cabinet. Here PPP and PML-N led coalition government has failed to resolve problems of general masses. Therefore this increase in salaries of government employees will make one class rich while depriving most of Pakistani nation. Such increase will increase inflation and price hike.
This budget is hard for private and business class. General Sales Tax (GST) is increased from 16 percent to 17 percent. GST is called killer tax since it is imposed on almost every item. Increase in electricity tariff is burden for general people. There is no incentive for general middle and poor class. It was my recommendation that government provide relief to whole nation not to a specific category of people.

Government of Pakistan Federal Budget 2010-2011 Suggestions

It is the first time that some serious circles asked me to submit proposals for the Government of Pakistan Federal Budget 2010-2011. I am very concerned and worried citizen of Pakistan. Inflation and price hike is increasing day by day and life of poor people is becoming harder. Here, I would like to suggest few important measures.
1- There should not be any further taxes at all on any business sector. Instead government should reduce their expenditures. In case only affluent sector of industry should be taxed.
2- If I had been a Senator, I would have recommended 10,000 rupees allowance for each poor unemployed family, free medicines for all poor ill people and three Marla homes for every homeless family. Government can take 4,000 rupees rent for such homes and deliver homes to people in fifteen years time.
3- There should be no increase in salaries of government employees since it increases inflation and price hike. If increase is presented than it should be same for all scales employees e.g. 3000 rupees increase for all employees including officers. Proportional increase gives more benefit to senior officers who are already rich.
4- There should be ban on government employment for at least five years. In this way there will be no further stress on government spending. I faced 10 years ban on employment in WAPDA when I did M.Sc. in the year 1993. There should also be ban on Civil superior services (CSS) officers induction since they consume high salaries and privileges thus increasing government expenditures.
5- Such sectors should be provided funds which face lack of earnings. They should be provided funds or work. For example web developer and IT sector is facing lack of work. It might be necessary for every registered company to develop a website.
6- In order to reduce government size, privatization must continue transparently.
7- Medical stores should be subsidized to provide cheap medicines.