Govt likely to present Rs13-15tr budget next week.

KARACHI -- Assuming record high mark up cost due to high interest rate, the coalition government is likely to present a Rs13-15 trillion budget for the fiscal year 2023-24, media reported Sunday citing a budget preview report by Topline Securities.

The report said that the government is expected to set the target of Rs9-9.2 trillion for the fiscal year 2023-24, up 21% from the target of Rs7.5 trillion set for the current fiscal year.

It should be noted that if set, the tax target for the financial year 2023-24 would be 29% higher than the expected tax collection in the outgoing FY23.

The brokerage house said it's a challenging time for the government to present a budget for the next year amid stagflation and uncertainties related to upcoming elections and how Pakistan would bridge its external account funding gap.

'This uncertainty on financing US dollar funding gap is creating nervousness in currency, bond, and stock markets,' the report said.

Revenue targets in the past have also varied on an average by 8% in last five years from actual targets. 'We expect the same to happen in FY24 amid economic slowdown,' it added.

Non-tax revenue target for FY24 was estimated at Rs2.5 trillion (2.4% of GDP) as against Rs1.6 trillion (2% of GDP) estimated for FY23. The report predicted some taxation measures by the government, including tax on undistributed reserves, continuation of super tax, shift from final tax regime to minimum tax regime, asset/wealth tax, higher tax on non-filers, tax on rental income, and tax on banks, tobacco, and beverages.

It expects Federal Public Sector Development Programme (PSDP), development spending, of Rs0.9 trillion for FY24.

'We may see major cuts in this due to fiscal constraints. Consolidated PSDP (federal and provincial) is anticipated to clock in at Rs2.6 trillion (2.5% of GDP) in FY24.

'On the political front with Imran Khan's Pakistan Tehreek-e-Insaf (PTI) being sidelined, it is possible that a...