ISLAMABAD: Prime Minister Nawaz Sharif has formally sent advice to President Mamnoon Hussain to summon National Assembly and Senate sessions on May 24 and 26, respectively, for the presentation of the federal budget 2017-18.

According to official sources, the prime minister has also sent a summary to the president requesting him to summon a joint session of both houses of parliament on June 1 for the mandatory annual presidential address. This will be the fourth address of President Hussain to parliament since his election in September 2013.

The sources said Finance Minister Ishaq Dar will make budget speech in the National Assembly on May 26 and lay the budget documents before the Senate on the same day. An official source told Dawn the government has almost finalised the draft of the Public Sector Development Programme (PSDP) for 2017-18 and Economic Survey 2016-17.

An insider said the government has decided to increase the salary and pension of government employees. However, the rate of increase has not been decided yet.

The source said that no major relief is expected in the budget unless the prime minister decides to intervene.

According to the source, the prime minister will convene a special meeting on the budget after his return from Riyadh.

The taxation part of the budget speech that focuses on tax rates and broadening the base has yet to be finalised, according to a tax official. “No new tax will be imposed in the budget,” the source said, adding that the focus is on the rationalisation and reverse cascading of tax rates.

To provide incentives to the local industry, duties and taxes will be brought down on raw materials.

In the last two days, tax officials met representatives of various sectors, including information technology, poultry and textile. A detailed summary that seeks changes in tariffs, duties and taxes on various sectors was also submitted by the commerce ministry. It was based on proposals received from stakeholders.

Tax officials gave a special presentation on Saturday to Mr Dar on the proposals that have been finalised so far. It has been decided that the government will continue with the zero-rating of five sectors – textile, leather, sports, carpet and surgical.

“We are considering including a few more sectors in the zero-rating regime – rice milling and processing, fish packaging and processing, meat and meat processing and pharmaceutical,” the source said.

A major relief in taxation is expected for the stock market. A tax credit of up to four years, against the existing provision for two years, may be allowed to attract new listings on the stock exchange.The withholding tax rate on commission and stock exchange services will also be reduced this year, the source said.

Another proposal is to enhance the exemption threshold to Rs500,000 from the existing Rs400,000 for the salaried class.

It said tax officials are also working on another proposal to change the definition of a resident person. In case the government agrees to the proposal, it will be binding on all nationals to disclose their assets abroad.

Another proposal is to enhance the limit of the probing of tax details of a filer up to 10 years in backdates. Currently, officials can only probe tax details up to five years in the case of return filers. For non-filers, the probe can be made up to 10 years.

According to the source, the Federal Board of Revenue wants to reduce duties on cigarettes on the recommendation of two major players, although the health ministry demands a further increase in rates.

Published in Dawn, May 21st, 2017