ISLAMABAD, June 6: Finance Minister Shaukat Aziz is to present here on Saturday a Rs805 billion federal budget for 2003-04, that is to include a massive Rs185 billion outlay for social sector spending.

No additional tax is being imposed by the government as reportedly decided by the budget planners on Friday.

Official sources said that Prime Minister Mir Zafarullah Khan Jamali had directed the finance minister and his team to present such a budget as did not burden the people, who were already experiencing economic hardship.

However, the budget speech of the finance minister in the National Assembly is likely to be marred by the opposition members’ agitation against the LFO.

According to the sources, the budget is likely to envisage a Rs505 billion revenue collection target, as against Rs460 billion fixed for the soon-to-be-ended 2002-03 fiscal year. The IMF is said to have proposed a Rs510 billion target.

Mr Aziz will also announce the withdrawal of most of the 144 remaining income tax exemptions. Last year, the government had withdrawn 55. The IMF and the World Bank are reportedly pressuring the government to remove undue IT exemptions, concessions and subsidies.

When contacted, the finance minister told Dawn that an effort had been made to rationalize the existing taxes in order to broaden the tax base.

“But rest assured, we have no plan to levy fresh taxes,” he said, adding that the ongoing restructuring of the Central Board of Revenue (CBR) will help the government collect more revenue by removing leakages and ensuring accountability in the tax departments.

Responding to a question, he said that overseas Pakistanis will be offered incentives to invest in their country. A decision, he added, had also been taken to offer a level playing field to foreign investors to invest in Pakistan.

Asked if the budget was going to offer any increase in salaries to the government employees or relief to pensioners and widows, the finance minister said it will contain some relief for the vulnerable classes. “But wait for a day to have all the details about it,” he added.

To another question, he said that construction and housing industry will be given tax exemptions and reduction in duties.

He said the government had found considerable fiscal space to make substantial financial allocations for poverty alleviation and social sectors. This fiscal space, he pointed out, had been found on account of reduction in the amount of debt servicing from 64 per cent to about 33 per cent.

Sources said the new budget will also reveal a new strategy, worked out by the Debt Coordination Office, to reduce local and foreign debts. Over 4,000 foreign loans have been categorized for their repayment on priority from the next financial year. Every year, the government plans to set aside additional $100 to $150 million for paying off most expensive and short-term loans.