The budget process for the next fiscal year has been slowed down due to ongoing political uncertainty in the country which raised serious questions about the approval of the budget for the next fiscal year before 30 June from the National Assembly.
President Arif Alvi dissolved National Assembly on the Advice of Prime Minister Imran Khan on April 3. Government sources said that there are two sides to the budget process including the revenue side and expenditure side.
Sources said that the budget preparations for the expenditure side are not difficult as 80 to 90 percent expenditure estimates are the same. They said that the estimates of the debt servicing, defense budget, and some other expenditures remain almost same for some years. However, government running expenditures and public sector development programs are required to make changes due to increases in salary and pension and development funds.
Former Secretary Finance Dr. Waqar Masood Khan said that the caretaker government has the power to give a budget for a certain period under article 86 of the Constitution of Pakistan. The elected government will endorse the expenditures. However, article 86 of the Constitution deals with only the expenditure side in absence of the National Assembly.
The article says “Notwithstanding anything contained in the foregoing provisions relating to financial matters, at any time when the National Assembly stands dissolved, the Federal Government may reauthorize expenditure from the Federal Consolidated Fund in respect of the estimated expenditure for a period not exceeding four months in any financial year, pending completion of the procedure prescribed in Article 82 for the voting of grants and the authentication of the schedule of authorized expenditure in accordance with the provisions of Article 83 in relation to the expenditure”.
The revenue side including tax and non-tax income is a very critical component for budget preparations.
The National Assembly is the only authorized platform for approval of the Finance Bill. The Finance Bill covers all tax-related issues.
A senior official of the FBR told ProPakistani that budget preparations are underway and hopefully prevailing political uncertainty will be ended within a few days.
When ProPakistani approached an economic expert for a comment, he said that there is a possibility that the same taxation system will prevail till the formation of the newly elected government. The new government will introduce new measures according to its priorities.
