The Federal Government of Pakistan is set to present the budget strategy paper for the next three years to the federal cabinet next week. The strategy paper outlines the proposed budget for the next fiscal year and predicts a budget deficit of 6.4% of GDP. However, there is projected to be an overall primary surplus of 0.3% of GDP. The paper also includes a proposed allocation of 1.7 trillion rupees for the defense budget, an increase from the 1.56 trillion rupees allocated in the current fiscal year.
Defense budget increase
The increase in the defense budget can be attributed to the country’s ongoing conflict with India, as well as the need to modernize the country’s military equipment. The proposed allocation of 1.7 trillion rupees for the defense budget is significant, as it accounts for nearly 20% of the total budget.
Tax collection target
The budget strategy paper also includes a proposed tax collection target for the next fiscal year. The Federal Board of Revenue (FBR) has set a target of 9.2 trillion rupees, up from the current fiscal year’s target of 7.2 trillion rupees. The FBR aims to collect a maximum of 8.6 trillion rupees in the next budget.
The proposed tax collection target is ambitious, given that Pakistan has struggled to meet its tax collection targets in the past. However, the government is hopeful that it can increase tax revenue by cracking down on tax evasion and expanding the tax base.
Conclusion
The budget strategy paper provides an insight into the government’s priorities and plans for the next fiscal year. The proposed increase in the defense budget and tax collection target reflect the government’s focus on national security and economic stability. It remains to be seen whether the government can successfully implement its plans and achieve its targets.