Rs6tr deficit budget to be unveiled today
The draft federal budget with a deficit of more than Rw6 billion has been prepared and will be presented to the Cabinet on Friday (today) for approval and then to parliament. That led to the proposal of 700 billion new taxes. The total budgetary expenditure is estimated at 14.5 billion IDR. Government employees are likely to receive a 30% increase in their temporary social security benefits as well as a 20% increase in pensions.
It is also recommended that the health and transportation allowance for civil servants be increased by 100%. The fiscal deficit target is set at 7.7% of GDP.A collection target of Rs 9.2 billion is assumed. The Federal Revenue Board (FBR) will be targeted to collect Rs 2.8 billion, of which 55% will be transferred to the states.
The federal government plans to spend N950 billion on development. An amount of Rs 200 crore will be spent on launching new projects under the public-private partnership model. The total provincial development budget has been allocated IDR 1.55 trillion.
A sum of Rs 1.8 billion is proposed for construction. Besides, the FBR is expected to raise another Rs 1.9 billion in the next fiscal. According to sources, the new tax will be imposed on property and corporate profits sector. The excise duty rate is likely to be further increased. A standard sales tax of 18% will be included in the budget.
A sales tax of 25% will be imposed on luxury goods. It is proposed to increase duties on imported vehicles with a capacity of more than 1,000 cc. It has decided to levy over 30% tax on mutual funds and real investment funds for non-reporters.
It is also proposed to increase import duty on luxury goods. It has also decided to double the tax levied on non-filers engaged in property sector transactions. Three proposals relating to salaries and pensions of civil servants are considered in the budget. Proposed 100% increase in medical and civil service benefits. In addition, a proposed 10% increase in their salary as a temporary benefit.
It is recommended to increase the pension by 10%. It is also proposed to increase pensioners’ health benefits by 100%.The second proposal is to increase the salaries of all civil servants from Grade 1 to Grade 2 by 25% in addition to increasing health benefits and travel allowances.
