ISLAMABAD: The federal cabinet gave on Wednesday a go-ahead to levy at least two new taxes in the next budget to increase revenue.

The decision was taken at a meeting of the cabinet presided over by Prime Minister Yousuf Raza Gilani.

Information Minister Qamaruz Zaman Kaira told reporters after the meeting that four new sectors — agriculture, stock exchange, real estate and services — had been identified for new taxation proposals. Real estate and services were likely to be picked for fresh taxation.

He said that agriculture would be taxed only after the government was satisfied that farmers were receiving sufficient returns on their crops.

The cabinet was informed that the fiscal deficit had been brought down to 4.3 per cent from 7.4 per cent and the current account deficit to 5.3 per cent from 8.4 per cent. Inflation has declined to 19 per cent from 25 per cent. Interest rates were being reduced to provide relief to the industry, it was told.

Kaira claimed the country’s economic indicators were showing an upward trend despite global recession and said that lowering down of fiscal and current account deficit would create vital fiscal space of about Rs160 billion. The amount would be spent on development and social sectors.

He expressed the hope that foreign exchange reserves, which at present stood at $7 billion, would reach $12 billion by the end of the current fiscal year. The revenue increase through new taxation was estimated at 9.6 per cent and it would be raised to 13.5 per cent, he added.

The cabinet was informed that the economic growth rate at present was mere 2.5 per cent mainly because of heavy expenses on the war on terrorism and it was a source of concern for the government. However, Kaira said the country had witnessed bumper crops of rice and wheat this year and it would help increase the growth rate.

He admitted that revenue receipts had declined to Rs1.25 trillion against the target of Rs1.40 trillion fixed for the current year mainly because of a decline in exports and an increase in imports.

The cabinet decided that Rs24 billion earmarked for the Benazir Income Support Programme would be increased in the next budget to cover more deserving people.

It also decided to raise the quota for minorities in public sector jobs to five per cent. The cabinet approved a proposal to add security features in Rs500 currency notes.