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Budget 2000-2001

Latest: POST-BUDGET PRESS CONFERENCE

Speech of Finance Minister Shaukat Aziz

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HIGHLIGHTS BUDGET AT A GLANCE TAX REVENUE SALIENT FEATURES

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• The speech has started at 10:20 p.m.

• There has been an increase in poverty and debts in the last ten years.

• Almost 70% of our tax earnings are from indirect taxes.

• Foreign loans hampers our country's independence.

• Our tax earnings are only 13% of GDP.

• Payment of loans was not included for ht emost part in the previous budget

• There was no effort to attract foreigm investment and revive their confidence

• Poverty increased due to less production over the years

• Fiscal discipline to be maintained to reduce the budget deficit

• Everyone will have to pay taxes

• There will be frugality in govt. expenditures

• We need the nation to stand with us

• Every tax payers has the right ot enquire ahow how the govt. spends the money. This has not beenn the trend but this trend wilb e brought about

• More than 1000 million to be saved by slashing unnecssary expenditures and by austerity on the part of the govt

• Privatisation will be made easy

• 10% would go to poverty alleviation programs

• 90% for debt servicing

• Textile policy: Value added items to be given priority

• Export facilities and easy loans for textile industry

• Small businesses to be encouraged through various incentives

• Software: This is the area which can bring revolutionary changes

• A Rs. 15 billion investment program to be launched by the govt. which will focus on spreading computer literacy in urban and mainly the rural areas

• Reduction in internet charges by 53%

• More incentives to software businesses

• Banks have been directed not to ask for any letter of credit of software companies for obtaining loans for any new computer business

• Ecommerce would be boosted

• Ecommerce section has been established at SBP

• Software firms to keep 25% of their incomes in foreign exchange for payments to consultants for expenditure on marketing and tours

• Tax exemption will be extended for computer institutes

• Exports to be made Value-Added

• Poverty alleviation program will be given 21 billion rupees

• Micro credit banks have already been started, to improve the condition of the poor lot

• Big land owners will now have to pay income-tax.

• As inflation has been below 4%, the national savings schemes will have to be rationalised

• Prices will gradually be deregulated

• Deficit, which is 6.1% for the previous year, will be reduced to 4.6% in the coming year.

• CBR revenue is expecte d to be to be 24% and expenditures will be reduced.

• There will be more development expenditure

• There would be separate tax rates for each province

• The financial condition of each province would be improved

• Grade 1 to 16 govt employees will be given Rs. 2000/- on Eid

• Tax rates will be reduced

• Tax amnesty scheme to be launched.

• So far, Rs. 2.1 billion have been received as tax

• The last date for submitting tax survey form has been extended to June 30.

• The tax survey will help in documenting the economy.

• Self-assessment scheme has been renewed, and will be applied to the corporate sector and salaried people and property owners. Only 15 to 20% of the cases will taken for audit.

• Taxes on non-profit organisations (researchers and teachers) to decrease by 50%

• Problems that hamper tax recovery will be removed

• Taxes will be reduced for the salaried people, the reduction ranging from 80% - 5% depending on the salary.

• There will be a 10% tax allowance for investment, investors will have the liberty to choose between that and the first year allowance.

• 5% withholding tax has been removed on special cars and instruments for the disables.

• Exemption certificates will now be issued within 90 days for a period of one year.

BUDGET AT A GLANCE FOR THE YEAR 2000-2001
(Note: The following figures are not final and
would be confirmed after the budget speech)

Table I

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TABLE - II
TAX REVENUE

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THE BUDGET 2000-2001
SALIENT FEATURES

2.1 The Budget 2000-01 has following salient features.

a) The total outlay of budget 2000-2001 is Rs. 698.0 billion. This is 8.7% higher than the budget estimates 1999-2000 and 4.7% over the revised estimates 1999-2000.

b) The resource availability during 2000-2001 has been estimated at Rs. 700.2 billion showing an increase of 6.8% and 9.7% over budget estimates 1999-2000 and revised estimates 1999-2000 respectively.

c) Net revenue receipts for 2000-2001 have been estimated at Rs. 412.1 billion which indicate increase of 9.3% over the revised estimates 1999-2000 and decrease of 2.6% over budget estimates 1999-2000.

d) The capital receipts (net) for 2000-2001 have been estimated at Rs. 78.0 billion which indicates an increase of 76.8% over budget estimates 1999-2000 and 25.8% over revised estimates 1999-2000 respectively.

e) The receipts from external resources in 2000-2001 are estimated at Rs. 178.5 billion. This shows a decrease of 3.5% over the budget estimates for 1999-2000.

f) The overall expenditure during 2000-2001 has been estimated at Rs. 698.0 billion of which the current expenditure is Rs. 577.6 billion and development expenditure Rs. 120.4 billion. Current expenditure shows a growth of 2.0% and development expenditure growth of 19.0% in budget estimates 2000-2001 over revised estimates 1999-2000.

g) The share of current expenditure in total budgetary outlay for 2000-2001 is 82.8% as compared to 81.9% in budget and 84.9% in revised estimates for 1999-2000.

h) The expenditure on running of civil government (included Rs. 26.1 billion of military pensions shifted from defence in BE(2000-01) is estimated at Rs. 80.2 billion indicating increase of 66.0% over budget estimates 1999-2000 and 67.4% over revised estimates 1999-2000.

i) The provinces will get Rs. 182.5 billion during 2000-2001 which is 32.3% and 28.3% higher than budget estimates 1999- 2000 and revised estimates 1999-2000 respectively.

j) The size of public sector development programme for 2000- 2001 is Rs. 120.4 billion. This shows an increase of 3.5% over the budget estimates for 1999-2000 and 19.7% over the revised estimates 1999-2000.

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