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Federal Budget lacks vision: PPP

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Islamabad, 7 June 2016: Pakistan Peoples Party Senator Saleem Mandviwalla has termed the Federal budget 2016-17 as Direction Less Budget having no Economic Vision, Long Term Policy and Strategy to improve the tax compliance, reduce tax evasion and to give a sigh of relief to the honest tax payers.

Senator Saleem Mandviwalla said this while addressing to the Press Conference along with PPP leader Syed Naveed Qamar MNA and Media Office In-charge Nazir Dhoki on Tuesday in Islamabad.

He said that The Federal Budget the Budget is completely lacking in any direction, Agriculture and Manufacturing sectors are two legs on which economy stands but both are facing worse conditions.

He said that Economy is running under IMF pressure the coming budget will be the 4th budget of this government under IMF dictation. The IMF is fully controlling the Pakistani economy

Senator Saleem Mandviwalla was of the view that Govt. manipulating figures each year since government has taken over in 2013; it is manipulating each and every figure like GDP growth, fiscal deficit, tax to GDP ratio, investment to GDP, inflation rate, unemployment rate.

Senator Mandviwalla was of the view that Pakistan Bureau of Statistics PBS is not independent; unfortunately, Finance Ministry is dictating and pressurizing them to manipulate figures in their favor. He said that the figure of 4.71% GDP growth is wrong and manipulated. As reported by an independent organization SPDC (Social Policy and Development Center) the growth rate for this year was 3.1 percent.

He criticized the performance of FBR, which has completely failed to enhance tax net and skewing the existing tax payers by imposing surcharges and regulatory duties. The Finance Minister in an answer to a question in Senate admitted that more than 120,000 filers have been reduced this year.

Senator Saleem Mandviwalla said that the government is manipulating the figures of Tax to GDP ratio and showing it over 12 percent but the fact is it is stagnant at 9 percent. Direct-Indirect tax ratio in actual is 15:85 percent, because more than 25 percent direct taxes are withholding taxes collected through agents. Government has imposed record percentage of sales tax on petroleum products which reached to 54 percent and seems like government is depending on only indirect taxes.

Senator Saleem Mandviwalla said that the number of Corporate Income Tax (CIT) filers is around 25,000 out of more than 60,000 companies registered and the number of active CIT filers is a mere 0.8 percent of total number of commercial and industrial electricity users.

Senator Saleem Mandviwalla said that the 78 percent of the borrowed money is being spent on non-development expenditure including employees’ salaries expenses

Senator Saleem Mandviwalla said that the Debt to GDP ratio is around 64 percent which is a clear violation of Debt Limitation Act. The Current government is getting foreign borrowing and retiring domestic debt which is a disaster for Pakistani economy. During last three years, government failed to present any comprehensive plan before the parliament for the removal of circular debt. What if the oil prices go high, again circular debt will rise.

He said that this government is importing huge amount of coal to run coal based plants. This will create worst impact on exchange rate and dollar price will rise further and decrease exports value.

Senator Mandviwalla said that the If we compare last five year position regarding Poverty Related Expenditure then,

  1. Roads, Highways & Bridges budget increased to 178 billion.
  2. Environment, water supply and sanitation budget decreased by 50 percent.
  3. Population planning budget decreased by 50 percent.
  4. Natural Calamities & Disasters budget decreased by 57 percent.
  5. Agriculture budget decreased by 50 percent.
  6. Rural Development budget decreased by 300 percent almost.

Senator Saleem Mandviwalla said that the Subsidies decreased by 300 percent almost

Exports were 26 billion in PPP government and reduced to around 20-21 billion this year.

PPP Proposals for Budget 2016-17.

Tax on immovable property – Violation of Constitution

PPP condemns the imposition of taxes on immovable property (Builders) and minerals. This is a clear violation of the Constitution and this tax is a provincial subject.

Housing scheme for poor

There should be social housing scheme (10 years) for poor as no housing scheme have been initiated since 1977. The govt. should over supply the housing plots for poor instead of building homes or flats.

Gradual decrease in GST

GST should be reduced gradually on manufacturing sector at least. It can be reduced by 1.5 percent every year.

Ex-cadre employee should be up-graded at par with In-cadre employees

The government is continuously focusing the interests of IN-CADRE federal govt. employees and ignoring EX-CADRE employees. Therefore, grades of EX-CADRE employees should also be upgraded at par with IN-CADRE employees, if EX-CADRE possesses the same qualification as required for the IN-CADRE employees.


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