ISLAMABAD: With suggestions of expenditure cuts and fiscal regulations of more than Rs600 billion, a mini-budget has been prepared by the government on Thursday following the staff-level agreement with the International Monetary Fund (IMF).
According to the adjustments made, Rs200bn have been reduced from the Public Sector Development Programme. This includes a deduction from general government expenditure of Rs50bn.
In the real state sector, the valuation rates have been increased by 90 per cent in 40 of the largest cities, with the number of cities doubling from what it was previously. The number of cities has been increased with the sole purpose of extra tax collection. Islamabad, Peshawar, Lahore, and Karachi are included in the list.
Regulatory duty will be imposed on electric vehicles imports, while importing all types of completely built unit (CBU) vehicles is restricted, and federal excise duty may get applied on CKD/SKD vehicles.
A decision regarding corporate guarantees for disputed import duties is also modified as now a pay order or a bank guarantee is required. Regulatory duty on several luxury items is proposed, and 525 non-essential items will face a regulatory duty.
According to a few analysts, the effects of the pro-growth budget, implemented five months ago, will be reduced with these steps and also help get the much-wanted $1bn from the IMF in January.
The bill is vetted in the law division after which it will be presented to the cabinet and then to the parliament for approval. On the other hand, Yusuf Khan has been removed from the finance secretary position, with him being replaced by Hamid Yaqoob Sheikh.