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3
WORK AGENDA
1. INTRO (Fiscal Policy, Bill)
2. TYPES & OBJECTIVES
3. GOVT (Receipts, Expense & Deficit)
4. STRUCTURE (Raising Fund)
5. CONSOLIDATED FUND
6. PROBLEMS: RELATED PAKISTAN
7. REMEDIES
8. CONCLUSIONS
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INTRODUCTION
FISCAL POLICY: “ Fiscal Policy considers:
1. Imposition of taxes
2. Govt. Expense
3. Public Debt”
CONTITUTIONAL “In Federal list Article 142:
FRAME WORK: 1. Currency
2. Public Debt
3. Finance & A/c”
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INTRODUCTION
FINANCE BILL: Govt Proposal for:
1. New Taxes
2. Alterations
3. Finance Act
4. Majors: Income, Sales,
Customs ETC
5. Foreign Trade
6. Loans & Grants
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TYPES OF FISCAL POLICY
1) EXPANSIONARY:
• Increase in Govt Purchases• Decrease in Govt Taxes
2 TYPES:2) CONTRACTIONARY:
• Decrease in Govt Purchases• Increase in Govt Taxes
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OBJECTIVES OF FISCAL POLICY
1) Self Reliance
2) Expansion of Exports
3) Stop Import of Luxury Goods
4) Promotion of Investment
5) Public Finance Distribution (NFC)
MAJOROBJECTIVES
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GOVT RECEIPTS, EXPENSE & DEFICIT
RECEIPTS:
1) REVENUE RECEIPTS ( Tax & Non Tax)
2) CAPITAL RECEIPTS
3) EXTERNAL RECEIPTS (Consortium & Non Consortium)
4) SELF FINANCING (Autonomous Bodies)
EXPENSES:
1) CURRENT EXPENDITURE
2) DEVELOPMENT EXPENDITURE (Defence, Social Service, Grants, Subsidies ETC)
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GOVT RECEIPTS, EXPENSE & DEFICIT
DEFICIT FINANCING:
1) PRINTING NEW CURRENCY
2) PUBLIC BORROWINGS
3) FOREIGN LOANS, AIDS, GRANTS
4) USING PREVIOUS BALANCES
5)BORROWING FROM BANKS
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CONSOLIDATED FUND
CONSOLIDATE
D FUND:
ARTICLE 78,81 & 121:
"one fund into which shall flow every stream of public revenue and from which shall come the supply of every service“
PARTS:
• FEDERAL & PROVINCIAL
• PUBLIC ACCOUNTS
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PROBLEMS IN PAKISTAN
TAX EVASIONS:
1) Complex structure
2) No punishment
3) Do not disclose true income
4) Exempted Sectors
5) Personal interest of High class
6) Narrow Tax Base
7) Heavy tax on Manufacturers
8) Avoid Value Added Items
9) Increased non Development Expense
10)Unfair tax structure
REVENUE & EXPENSE GAP:
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PROBLEMS IN PAKISTAN
BUDGETARY SHORTFALLS:
1) Power Shortage
2) Industrial Crisis
3) Tax Evasion by well performing Industries
4) Stock Exchange pays minimal tax
5) Corruption by tax officials
6) Real State business pays minimal tax
7) Law and Order Causing Burden
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REMEDIES OR RECOMMENDATIONS
Remedial Measures:
1) FBR should impose new taxes
2) Increase price of utility
3) Decrease in development expending
4) Measures for natural disasters
5) Balance between defence & federal budget
6) Increase in tax base
7) Law and order conditions