what is budget.pakistan budget 2011

PAKISTAN BUDGET 2011-12PRESNTED BY:

SIKANDER ALI BALOCH E=03

SHAH JAHAN E=09

CLASS:

MBA (E)2010-12

PRESENTED TO:

SIR KHURAM

INSTITUTE OF MANAGEMENT SCIENCES UNIVERSITY OF

BALOCHISTAN.

OUTLINE OF PRESENTATION

WHAT IS BUDGET. COMPONENTS OF BUDGET. PAKISTAN BUDGET 2011-12. SALIENT FEATURES OF BUDGET 2011-12.

WHAT IS BUDGET The term budget is derived from the French word

"Budgette" which means a "leather bag" or a "wallet". Budget is a statement of the financial plan of the

government. It shows the income & expenditure of the government during a financial year.

So, every citizen of a nation from the common man to the politician is eager to know about the budget as they would like to get an idea of the :-

1. Financial performance of the government over the past one year.

2. To know about the financial programmes & policies of the government for the next one year.

3. To know how their standard of living will be affected by the financial policies of the government in the next one year.

COMPONENTS OF BUDGET

COMPONENTS OF BUDGET CONT…

REVENUE BUDGET.This financial statement includes the revenue receipts of the government i.e. revenue collected by way of taxes & other receipts. It also contains the items of expenditure met from such revenue.(a) Revenue Receipts ↓These are the incomes which are received by the government from all sources in its ordinary course of governance. These receipts do not create a liability or lead to a reduction in assets.

Revenue receipts are further classified as tax revenue and non-tax revenue.

Tax revenue Non-tax revenue

COMPONETS OF BUDGET CONT….

TAX REVENUE:

Tax revenue consists of the income received from different taxes and other duties levied by the government. It is a major source of public revenue. Every citizen, by law is bound to pay them and non-payment is punishable.

Taxes are of two types (i) Direct taxes (ii) Indirect taxes. Direct taxes: are those taxes which have to be paid by the

person on whom they are levied. Its burden can not be shifted to some one else. E.g. Income tax, property tax, corporation tax, estate duty, etc. are direct taxes. There is no direct benefit to the tax payer.

Indirect taxes: are those taxes which are levied on commodities and services and affect the income of a person through their consumption expenditure. Here the burden can be shifted to some other person. E.g. Custom duties, sales tax, services tax, excise duties, etc. are indirect taxes.


NON-TAX REVENUE: Apart from taxes, governments also receive revenue

from other non-tax sources. The non-tax sources of public revenues are as follows :- Fees : The government provides variety of services for

which fees have to be paid. E.g. fees paid for registration of property, births, deaths, etc.

Fines and penalties : Fines and penalties are imposed by the government for not following (violating) the rules and regulations.

Profits from public sector enterprises : Many enterprises are owned and managed by the government. The profits receives from them is an important source of non-tax revenue. For example, Pakistan Railways, SSGC, PIA, WAPDA, etc. are owned by the Government of pakistan. The profit generated by them is a source of revenue to the government.


Gifts and grants : Gifts and grants are received by the government when there are natural calamities like earthquake, floods, famines, etc. Citizens of the country, foreign governments and international organizations like the UNICEF, UNESCO, etc. donate during times of natural calamities.

Special assessment duty : It is a type of levy imposed by the government on the people for getting some special benefit. For example, in a particular locality, if roads are improved, property prices will rise. The Property owners in that locality will benefit due to the appreciation in the value of property. Therefore the government imposes a levy on them which is known as special assessment duties.


REVENUE EXPENDITURE:

Revenue expenditure is the expenditure incurred for the routine, usual and normal day to day running of government departments and provision of various services to citizens. It includes both development and non-development expenditure of the Central government. Usually expenditures that do not result in the creations of assets are considered revenue expenditure.

Expenses included in Revenue Expenditure :-

1. Expenditure by the government on consumption of goods and services.

2. Expenditure on agricultural and industrial development, scientific research, education, health and social services.

3. Expenditure on defence and civil administration.


4. Expenditure on exports and external affairs.5. Grants given to State governments even if some of them

may be used for creation of assets.6. payment of interest on loans taken in the previous year.7. Expenditure on subsidies.

CAPITAL BUDGET:This part of the budget includes receipts & expenditure on capital account projected for the next financial year. Capital budget consists of capital receipts & Capital expenditure.

Receipts which create a liability or result in a reduction in assets are called capital receipts. They are obtained by the government by raising funds through borrowings, recovery of loans and disposing of assets.

Any projected expenditure which is incurred for creating asset with a long life is capital expenditure. Thus, expenditure on land, machines, equipment, irrigation projects, oil exploration and expenditure by way of investment in long term physical or financial assets are capital expenditure.

PAKISTAN BUDGET 2011-12

PAKISTAN BUDGET 2011-12

Pakistan’s Finance Minister Abdul Hafeez Shaikh presented the Financial Budget 2011-12 in the National Assembly June 3, 2011. The total outlay of budget 2011-12 is Rs.2767 billion. The size is 14.2 per higher than the size of budget estimates of 2010-11.The resource availability during 2011-12 has been estimated at Rs. 2463 billion against Rs. 2256 billion in the budget estimates of the outgoing fiscal year

Govt Announced Employees 15% pay raise & Pension 15 to 20% in Budget 2011-2012:Net revenue receipts for 2011-12 have been estimated at Rs. 1529 billion indicating an increase of 11 percent over the budget estimates of fiscal year 2010-11.

The provincial share in federal revenue receipts is estimated at Rs. 1203 billion during 2011-12 which is 16.4 per cent higher than the budget estimates for 2010-11.

SALIENT FEATURES OF BUDGET 2011-12

SALES TAX ACT, 1990:- Reduction in the rate of sales tax from 17% to 16%,

however, items subject to higher rate of sales tax remain unchanged.

Adjustment of input tax allowable in the month of payment instead of 12 installments in case of acquisition of fixed assets.

In case of black-listing of supplier, no input tax shall be allowed after or prior such black-listing.

The action of Officer Inland Revenue can also be condoned in case of time barred.

Zero per cent rate of sales tax facility in case of diapers, CNG buses, trucks, dumpers, trailers, and road tractors has been withdrawn.

Exemption on as many as 21 items has been withdrawn.


ICOME TAX:- Basic exemption limit is proposed to be enhance from

Rs.300,000/- to 350,000/. The rate of tax deductible on cash withdrawal from bank is

imposed to be reduced from 0.3% to 0.2%. Commercial and Industrial consumer of electricity with

annual billing above Rs.1,000,000/- is proposed to file return of income.

Investment by non-resident in Government Securities subject to withholding tax on profit on debt at 10% is proposed to be final tax

Tax deducted on purchase of air ticket is proposed to be considered adjustable.


FEDERAL EXCISE ACT. Special excise duty has been proposed to withdraw. 8% FED has been levied on manufacturing of white

crystalline sugar in sales tax mode. Duty on unmanufactured tobacco proposed to enhance

from Rs. 5/kg to Rs. 10/kg. Duty on cement proposed to reduced from Rs. 700/MT to

Rs. 500/MT. FED on services provided by cable TV operator has been

proposed to withdraw.


CUSTOMS ACT: Removal of Regulatory duty, particularly on edible items. Reduction of duty to 5% on pharmaceutical raw materials. Incentive for CNG compressors manufacturing industry

through

concession on its 15 components. Concession in machinery and equipment to incentivize oil

exploration companies. It has been proposed to levy transit fee on goods in transit

across

Pakistan. Incentives for glass industry through concession on its two

major raw materials namely “mirror backing paint” and “waste / scrap of glass.

THANK YOU!

what is budget.pakistan budget 2011

Education