Here are some of the key facts about the upcoming federal budget 2023-24 which will be tabled in the National Assembly on June 9.
Finance Minister Ishaq Dar announced the date on May 11 while speaking to journalists after a seminar organized by the National Security Division in Islamabad.
The outlay for the federal budget 2023-24 is expected to be at Rs16,600 billion or Rs16.6 trillion compared to the Rs9.5 trillion federal budget for the fiscal year 2022-23.
Pay raise for govt employees
The government plans to announce a 20% increase in salaries of federal government employees and a 15% increase for pensioners.
The raise, however, may not help government employees to catch up with inflation which stands at over 40%.
In the fiscal year 2023-24, the public sector development program (PSDP) will be taking the brunt of the economic woes in the country.
The PSDP for the year 2024 has been estimated at Rs950 billion, slightly higher than the Rs800 billion allocation for the ongoing fiscal year. There are also reports that it could be reduced to Rs700 billion.
An additional Rs150 billion will be spent under the public-private partnership programs.
GST and other taxes
The government has no plans to offer tax relief to people. So, the taxes introduced under the mini-budget will be part of the next year’s budget.
The GST rate was increased from 15% to 18% under the mini-budget introduced in February. It will be kept unchanged. This means packed food will remain expensive.
The government raised Rs177 billion in taxes via the mini-budget and these taxes will be levied in the next fiscal year too.
A 25% tax on luxury items will also remain unchanged.
Total government revenue from direct taxes will increase by Rs500 billion, according to sources.
The Federal Bureau of Revenue (FBR) is being given a target of Rs8,200 billion for revenue collection compared to an Rs7,000 billion target for the fiscal year 2022-23.
Government plans to raise Rs2,396 billion from the non-tax revenue.
Vicious cycle of debt
Pakistan will be paying $7.56 billion (Rs2,140 billion at the current exchange rate) in debt servicing in the next fiscal year.
To pay the interest on its debt and to repay some of the principal amounts, the country will be borrowing more money from local and international sources.
The government plans to secure at least Rs1,804 billion from other countries or financial institutions.
This story was originally published on May 30, 2023.