Federal Budget 2018-19
This year the Federal Budget 2018-19 is non-conventional as
compared to the last four year’s budgets, where the government
presented a popular budget with an eye on the upcoming general
elections. According to budgetary documents, total subsidies for
the fiscal year 2018-19 have been estimated at Rs174.75 billion,
which increased by 25.9%, and 18.4% over the budget and revised
estimates of 2017-18.
In the budget five export sectors namely textiles, leather,
sports goods, surgical goods and carpets shall continue to
remain in zero-rated sales tax regime.
In the Federal Budget 2018-19 several positive steps taken to
facilitate general trade and industry like continuation of Tax
Credit on BMR on new investment / establishment of new industry;
reduction in tax slabs; curtailment of discretionary power of
tax collectors and reverted back to the Federal government
instead of FBR with the approval of Minister-Incharge; reduction
of customs duties on certain items; rationalization and
reduction of tax rates for individuals, AOPs and Companies.
All Pakistan Textile Mills Association (APTMA) has deeply
disapproved the proposed Federal Budget 2018-19. It says, the
government is not serious about implementing the Rs180 billion
Prime Minister's export led growth package as till now only Rs1
billion has been released by the State Bank of Pakistan.
The government is expecting exports to grow in the financial
year 2018-19 on the premise of incentives announced in the
budget. The export package drew a poor response from exporters,
who termed it insignificant to boost export proceeds from the
In the budget speech, no assurance was made about continuing
the cash export subsidies under the prime minister’s package
scheme in the next fiscal year. However, the outcome of the
package in terms of increase in exports in the past nine months
A few measures announced in the budget speech focus on
continuation of past policies, especially those related to
tariff rationalization. The tariff reduction on industrial raw
materials will increase competitiveness of exports and help in
reducing the current account deficit.
Member Customs Zahid Khokhar said the duty reduction will
cost over Rs1.5 billion in revenue to customs collection.
However, he said the measures will promote exports of these
Budget documents show the government is working on a new
package to encourage exports. Keeping in view the prevailing
circumstances, this package will focus on increase
non-traditional and value-added exports.
As part of the package, government has withdrawn 11% customs
duty on synthetic filament tow of acrylic or mod-acrylic by
inclusion in the Prime Minister’s Export Package.
The proposed plan announced in the budget for clearance of
export sector refunds has drawn criticism from almost all
sectors. As per the plan, currently pending refund claims will
be cleared in a phased manner over the next 12 months starting
July 1, 2018. But exporters were disappointed in the government
for not providing a roadmap to clear past refunds.