ISLAMABAD - The government on Tuesday conceded in the National Assembly that the public debt increased considerably during its tenure as the loan was spent to arrest power crisis, build roads network and increase the economic productivity.

The House approved 92 charge expenditures of different ministries. Of the total 151 charge expenditures, the opposition did not submit any cut-motion on it.

Finance Minister Dr Miftah Ismail informed the house that spending on different sectors had yielded results as, according to him, Pakistan’s economy grew all-time high in 13 years with 5.8 percent growth during the outgoing fiscal.

Winding up the discussion on Budget 2018-19, the minister said the present government has added 12,230 megawatts of electricity to the national grid which helped bridge the demand and supply gap.

“The country was facing 16 to 18 hours of loadshedding in 2013 when this government assumed the charge,” he said.

Miftah said efforts were made to reduce the mounting circular debt to avoid electricity outages in the summer season. He appealed to the provincial governments to help the federal government in collecting electricity bills and controlling power theft.

He said that 49 of the 157 proposals forwarded by the Senate were fully or partially accepted for incorporation in the budget, while the rest [108] which related to the Public Sector Development Programme were sent to the Planning Division with comments to have favourable consideration.

The finance minister announced that some amendments will be made in the budget.

He announced that the conveyance allowance of government employees of grade-1 to grade-16 is being increased by 50 percent. However, it would be applicable to those employees who stay till late hours in the office.

“The government would bring an amendment to Alternative Dispute Resolution (ADR) system to make it effective and strong.”

Miftah said that non-filers of tax returns will not be able to purchase a property but the limit for this purpose has been enhanced from Rs4 million to Rs5 million.

The government has determined 120 days for custom duty refunds.

He said that government has decided to enhance customs duty on imported fish fillet from 11 percent to 20 percent in order to promote domestic industry of fish fillet.

Reduction in taxes

The minister announced reduction in the tax on import of LNG from six to one percent, and exempting the matches industry from the sales tax.

He also announced reducing the income tax by 50 percent for those builders who would construct housing units costing up to Rs2.5 million for low-income groups.

Miftah said the government has approved the Senate’s proposal to reduce the sales tax on fish babies/seedlings to five percent in order to promote fisheries in the country.

He informed the assembly that government has also accepted a proposal of the Senate to slash the federal excise duty on air tickets from Rs2,500 to Rs2,000 on long domestic routes.

The finance minister said that the government would give cash award for the export of information technology services. Similarly, the government has extended tax exemption on the export of information technology services. The government has also announced reducing the sales tax to 5 percent on the services of information technology services in the federal capital.


He said that the government was introducing a new scheme to overcome the scarcity of gypsum in the fields. Under the proposed scheme, the expenditures would be borne by the federal government, provincial governments and farmers.

The government would give a subsidy of Rs2000 per acre on a land of 12.5 acres. The government has also decided to impose 20 percent customs duty on the export of gypsum.

The government has also approved to reduce sales tax on rock phosphate (part of Potassic fertilizer) from 17 to 10 percent.

The finance minister said that the government has decided to extend the deadline for paying electricity bills for farmers for another one year. The government has offered 25 percent concession for those farmers who would pay their electricity dues during the first quarter (July to September) of the next fiscal year, he said. This will benefit the farmers to the tune of Rs6 billion, he said.


He said that the government was working to devise a new exports’ package on the directives of Prime Minister Shahid Khaqan Abbasi, which would be announced in next few days. Former prime minister Nawaz Sharif had announced an exports’ package in 2017, which would expire on June 30.

Other measures

Ismail defended the budget by saying that the government has given unprecedented tax relief to every segment of the society in the next year’s budget. He assured that adjustment in the upper limit of petroleum development levy will not increase prices of petroleum products.

He also clarified that the government has taken measures to facilitate the poor segment of the society by increasing allocations for the Benazir Income Support Programme three times from Rs40 billion in 2013. He said that the government has also increased power subsidy to Rs150 billion.

He expressed the confidence that the next year’s budget will give further impetus to the economy and economic activities in the country.

NFC Award

The finance minister blamed the provincial governments for the delay in constituting the National Finance Commission (NFC) award. Without naming any federating unit, he said that three provinces had recommended to the federal government to delay the constitution of NFC award till the finalisation of population census results.