Explanatory Memorandum on Federal Receipts

FEDERAL BUDGET 2025-26

GOVERNMENT OF PAKISTAN FINANCE DIVISION ISLAMABAD

PREFACE

Article 80(1) of the Constitution of Islamic Republic of Pakistan requires that the Federal Government shall, in respect of every financial year, cause to be laid before the National Assembly a statement of estimated receipts and expenditure of the Federal Government for that year, referred to as the Annual Budget Statement. The statement shall also be transmitted to the Senate as required under Article 73(1) of the Constitution.

“Explanatory Memorandum on Federal Receipts” is a supplementry document elaborating upon the nature and source of all the federal receipts included in the Annual Budget Statement. The document categorizes these receipts into internal, external and public account receipts and further bifurcates them as tax, non-tax and capital receipts. External receipts comprise of foreign project loans and grants while public account receipts include deferred liabilities and deposit reserves.

With the aim of helping the readers to form a broader view of the federal resources that have determined the formulation of the Budget for Budget for 2025-26, the nature of receipts has also been explained, wherever considered appropriate. I hope that this document would be useful for a comprehensive understanding of the Annual Budget Statement.

IMDAD ULLAH BOSAL

Secretary to the Government of Pakistan

Finance Division Islamabad, the 10th Jun e, 2025

CONTENTS

CHAPTER 1:

AN INTRODUCTION TO FEDERAL RESOURCES

• 1.1 Resource mobilization is essential to meet the recurring as well as development expenditures. At the Federal level, resources are generated through a well-coordinated and concerted effort by the revenue collecting agencies and administrative units. All revenues collected by the collecting agencies and administrative divisions of the Federal Government, all loans raised, and all moneys received as repayments of loans form part of the Federal Consolidated Fund. Besides, all other money received by or on behalf of the Federal Government or received or deposited with the Supreme Court or any other court established under the authority of the Federation are part of the Public Account of the Federation in terms of Article 78(1) and (2) of the Constitution of Islamic Republic of Pakistan. All revenue receipts are part of the Annual Budget Statement (ABS), which is presented before the National Assembly in terms of Article 80 of the Constitution.

• 1.2 Federal Revenue Receipts are broadly categorized as :-

  • (I) Tax Revenue (TR)

  • (II) Non-Tax Revenue (NTR)

• 1.3 Tax Revenue receipts are collected by the Federal Board of Revenue and are distributed amongst provinces in accordance with the provisions of Article 160 of the Constitution. Non-Tax Revenue is the revenue received by the Government in terms of Article 78(1) of the Constitution and the recurring income of the government from investments and provision of services but does not include those mentioned in Article 160(3) of the Constitution.

• 1.4 In addition to the revenue receipts, there are capital receipts reflected in Annual Budget Statement. Capital receipts comprise of recoveries of loans and advances from provincial governments, local bodies, financial institutions etc. as well as Public Debt raised through various government securities. The former is part of Federal Consolidated Fund while Saving Schemes and net receipts from transactions under Deposits and Reserves form part of Public Account of the Federation.

• 1.5 Federal receipts may also be classified as internal receipts and external receipts. Internal receipts comprise of revenue receipts and capital receipts. External receipts comprise of project loans and grants, progamme loans and other loans which are received from specialized financial institutions and friendly countries for specific development needs and budgetary requirements.

TABLE 1

SUMMARY OF FEDERAL RESOURCES

PART-I INTERNAL RECEIPTS (TAX REVENUE, NON-TAX REVENUE AND CAPITAL RECEIPTS)

CHAPTER 2:

REVENUE RECEIPTS 2.1 Revenue receipts constitute major component of total Federal resources. Revenue receipts are mainly categorized as Tax revenue receipts and Non-Tax revenue receipts, which are largely derived from the following sources:-

• i. Collection of Federal Taxes by FBR

• ii. Surplus Profit of Regulatory Authories/Bodies

• iii. Mark up on loans advanced by the Federal Government

• iv. Dividends

• v. Fees, penalties and other Miscellaneous receipts realized by administrative Ministries and Divisions of the Federal Government

• vi. Surcharges, Cess, Levy and Royalty on Petroleum

2.2 TAX REVENUE RECEIPTS 2.2.1 Tax Revenue receipts are administered by the Federal Board of Revenue (FBR). These receipts constitute inland revenue and can be categorized as direct taxes and indirect taxes. Direct taxes include income tax, capital value tax, ordinary collection (workers welfare fund) and contribution under companies profits (workers profit participation fund), while sales tax, federal excise duty, and customs duty constitute indirect taxes.

2.3

NON TAX REVENUE RECEIPTS 2.3.1 Non-Tax Revenue means revenues received by the Government in terms of Article 78(1) of the Constitution and the recurring income of the Government from investments and provision of services but does not include those mentioned under Article 160(3) of the Constitution. Non-Tax Revenue of the Federal Government is administered by various Ministries / Divisions/ Departments under the following broad categories:

• i) Levies and Fees ii) Income from Property and Enterprise iii) Receipts from Civil Administration etc iv) Surplus Profit of Regulatory Authories/Bodies v) Dividends vi) Miscellaneous Reciepts

Summary of Revenue Receipts with Budget Estimates and Revised Estimates for Fiscal Year 2024-25 and Budget Estimates for Fiscal Year 2025-26 is given as under:

TABLE 2

SUMMARY OF REVENUE RECEIPTS

(Rs. In Million)

CHAPTER 3: TAX REVENUE RECEIPTS

3.1 FBR TAXES

• 3.1.1 FBR taxes comprise of direct taxes such as income tax, capital value tax, ordinary collection (WWF) and contribution under companies profits (WWF), and indirect taxes such as sales tax, federal excise duty (FED) and customs duty. The inland revenues include direct taxes,sales tax and FED. Direct taxes mainly comprise of income tax. The following table shows the budgeted and revised estimates for FY 2024-25 and buget estimates for FY 2025-26.

TABLE 3

ESTIMATES OF FBR TAXES

(Rs. In Million)

• 3.1.2 Detailed analysis of individual taxes/duties are highlighted below:

3.1.3 DIRECT TAXES

• 3.1.3.1 The revenue collection of Direct Taxes for July-May 2024-25 stood at Rs.4,900.8 billion with growth of 27%.The revised target of Direct Taxes for FY 2024-25 was estimated at Rs.5,826.0 billion. The target for FY 2025-26 has been estimated at Rs.6,902.0 billion.

• 3.1.3.2 Along with Income Tax , Workers Welfare Fund (WWF) and Workers Profit Participation Fund (WPPF) are also collected by field formations of Inland Revenue. The revised budget estimates for receipts of WWF and WPPF for FY 2024-25 is Rs.21.7 billion and Rs.40.4 billion, respectively, while for Capital Value Tax (CVT) is Rs. 14.5 billion.

• 3.1.3.3 The Budget Estimates FY 2024-25, Revised Budget Estimates FY 2024-25 and Budget Estimates for 2025-26, on account of Direct Taxes are tabulated hereunder in Table 4:

TABLE 4

DIRECT TAXES

(Rs. In Million)

3.1.4 Sales Tax

• 3.1.4.1 The revenue collection of Sales Tax for July-May FY 2024-25 stood at Rs.3,503.5 billion as against Rs.2,768.8 billion in the corresponding period of the last financial year showing an increase of 26.5%. The revised target for FY 2024-25 is estimated at Rs.3,984.0 billion.The target for FY 202526 has been estimated at Rs.4,753 billion.Details are given in table 5:

TABLE 5

SALES TAX

(Rs. In Million)

3.1.5 Federal Excise Duty

• 3.1.5.1 The revenue collection of FED for July-May FY 2024-25 remained at Rs.672.9 billion as against Rs.503.0 billion in the corresting period of the last financial year showing a growth of 33.8%. The revised budget estimates for FY 2024-25 is projected at Rs.774.0 billion.The target for FY 2025-26 has been estimated at Rs.888.0 billion.Details are given in table 6:

TABLE 6

FEDERAL EXCISE DUTY

(Rs. In Million)

3.1.6 Customs Duty

• 3.1.6.1 The revenue collection of Customs Duty for July-May FY 2024-25,stood at Rs.1,156.7 billion showing an increase of 16.3% as compared to the corresponding period of FY 2023-24.The revised budget estimates for FY 2024-25 is projected at Rs.1,316.0 billion.The target for FY 2025-26 has been estimated at Rs.1,588.0 billion.

• 3.1.6.2 A summary of projection of Customs Duty target including the projection of collection from major revenue spinners during FY 2024-25 and FY 2025-26 is given at Table 7:

TABLE 7

CUSTOMS DUTIES REVENUE

CHAPTER 4:

NON TAX REVENUE

• 4.1 Non-Tax Revenue represents the recurring income earned by the Federal government from sources other than taxes. Major receipts under this head are "interest receipts" (received on loans extended by the Federal government to provinces, public sector enterprises etc), "dividends" received from public sector entities, "several receipts" from petroleum sector and "profits" earned by various regulatory authorities. Various services provided by the government i.e social services, community services, economic services, defence services etc also yield revenue for the government. Breakdown of Non-Tax Revenue against ministries/divisions, departments, institutions and authorities is given as Annex III. On the basis of functional classification, Non-Tax Recenue falls under four major heads i.e. levies and fees, income from property and enterprises, receipts from civil administration and other functions, and misc receipts of the federal ministries, divisions and departments.

• 4.2 Summary of Non-Tax Revenue with Budget and Revised Estimates for Fiscal Year 2024-25 and Budget Estimates for Fiscal Year 2025-26 is given below:-

TABLE 8

Summary of Non-Tax Receipts

(Rs. In Million)

4.3 Levies and Fees

• 4.3.1 Major sources of Levies and Fees comprise the receipts of the Islamabad Capital Territory Administration, Mobile Handset Levy, and Airport Fee.

4.3.2 Receipts of Islamabad Capital Territory Administration

• 4.3.2.1 A number of levies and fees are collected by the ICT Administration. Receipts included in this category are Motor Vehicle Registration, Token Fee, Stamp Duties, Tax on Hotels, Land Revenue etc. These receipts are collected under various laws.

4.3.3 Mobile Handset Levy

• 4.3.3.1 Mobile Handset Levy was imposed on import of high end mobile handsets.

4.3.4 Airport Fee

• 4.3.4.1 Pakistan Airports Authority collects Airport Fee from passengers for various services offered at the airports at rates notified by the Government from time to time. The airline companies charge Airport Tax at the time of preparation of Air Ticket and deposit the same in the Federal treasury.

• 4.3.4.2 Budget and Revised Estimates for Fiscal Year 2024-25 and Budget Estimates for 2025-26 on account of Levies and Fees are tabulated below:-

TABLE 9

Levies and Fees

4.4 Income from Property and Enterprises

4.4.1 Income from Property and Enterprises comprises of profits earned by regulatory authorities, Markup receipts on loans extended to provinces, AJK, Public Sector Enterprises, Local bodies, etc and dividends paid on Federal government's investment in the share capital of financial and non financial institutions.Revised Estimates for Fiscal Year 2024-25 and Budget Estimates for FY 202526 are given as under:-

TABLE 10

Income from Property and Enterprises

(Rs. In Million)

4.4.2 Surplus Profit of PTA and Other Government Authorities

• 4.4.2.1 Profits earned by the Regulatory Authorities i.e PTA, NEPRA, SECP, PNRA, PEMRA ,OGRA, PQA, DRAP and AOB by way of levy of fees, charges, penalties etc. after settling of their authorized expenses is deposited in the Federal Consolidated Fund. Brief introduction of Regulatory Authorities is given as under and related statistics in Table 11.

• 4.4.2.2 Pakistan Telecommunication Authority (PTA) is mandated to; i) regulate the establishment, operation and maintenance of telecommunication systems and provision of telecommunication services in Pakistan; ii) dispose off applications for the use of radio-frequency spectrum, promote and protect the interests of users of telecommunication services in Pakistan; iii) promote the availability of a wide range of high quality, efficient, cost effective and competitive telecommunication services throughout Pakistan; iv) promote rapid modernization of telecommunication systems and telecommunication services; v) investigate and adjudicate on complaints and other claims made against licensees arising out of alleged contraventions of the provisions of the Act, the rules made and licenses issued thereunder. It also imposes fines and penalties for violations.

• 4.4.2.3 National Electric Power Regulatory Authority (NEPRA) is mandated to develop and pursue a regulatory framework, which ensures the provision of safe, reliable, efficient and affordable electric power to the electricity consumers of Pakistan. It facilitate the transition from a protected monopoly service structure to a competitive environment and maintaining a balance between the interests of the consumers and service providers in unison with the broad economic and social policy objectives of the Government of Pakistan. In order to ensure effective regulatory functions, NEPRA charges different fees at rates notified from time to time for Application & Modification Generation License Fee, Application & Modification Transmission License Fee, Application & Modification Distribution License Fee, Application for the Approval of Competitive Bidding. Besides, NEPRA upfront tariff is also levied like Fees Pertaining to Tariff Standards and Procedures Regulations 2002 i.e Generation Licenses, Transmission Licenses, Distribution Licenses, Consumers, etc.

• 4.4.2.4 Pakistan Nuclear Regulatory Authority (PNRA) is entrusted with the responsibility to control, regulate and supervise all matters related to nuclear safety and radiation protection in Pakistan. It charges Licensing Fee as approved from time to time from nuclear facilities, radiotherapy and nuclear cardiology centres etc.

• 4.4.2.5 Pakistan Electronic Media Regulatory Authority (PEMRA) is required to; i) improve the standards of information, education and entertainment; ii) facilitate the devolution of responsibility and power to the grass roots by improving the access of the people to mass media at the local and community level; and iii) ensure accountability, transparency and good governance by optimization the free flow of information. PEMRA charges Licensing Fee on prescribed rates for FM Radio, Satellite T.V, MMDS, IPTV, Cable TV, DTH, Landing Rights, Temporary Uplinking and Mobile TV.

• 4.4.2.6 Oil and Gas Regulatory Authority (OGRA) has been set up under the Oil and Gas Regulatory Authority Ordinance of March 2002 to; i) foster competition, increase private investment and ownership in the midstream and downstream petroleum industry; ii) protect the public interest while respecting individual rights and provide effective and efficient regulations. In order to implement regulatory framework, OGRA issues Licences to oil marketing companies, gas distribution networks, fertilizer manufacturing plant etc. and charge fees for these services. It also carries out inspections of oil and gas distribution networks and imposes penalties in case of violations.

• 4.4.2.7 Drug Regulatory Authority of Pakistan (DRAP) has been established under the DRAP Act 2012 with a mandate to; i) provide effective coordination and enforcement of the Drug Act,1976; and ii) bring harmony in inter provincial trade and commerce of theraptic goods.The regulatory functions of DRAP include registration and marketing, authorization, inspection, laboratory testing, clinical trials etc. and fee is charged against theses services.

• 4.4.2.8 Audit Oversight Board (AOB) is an organization formed under Part IXC of Securities and Exchange Commission of Pakistan Act, 1997. AOB was established in Pakistan to provide oversight to ensure audit quality of Public Interest Companies (PICs). AOB imposes penalities on Audit firms who fail to comply with requirements of SECP Act,1997.

TABLE 11

Surplus of Govt Authorities

4.4.3 Mark Up Receipts

• 4.4.3.1 Federal Government advances loans to Provinces, Government of Azad Jammu & Kashmir, Public Sector Enterprises, Local Bodies and others to assist them in carrying out their development programmes and social initiatives. These loans and advances are of two types, namely; i) Cash Development Loans; and ii) Foreign Re-lent Loans. The former is advanced by the Federal Government out of its own resources whereas the latter is obtained from foreign lenders.

• 4.4.3.2 Mark up accrued on the loans granted by the Federal Government to provincial governments, local bodies, financial institutions, non-financial institutions, commercial departments and government servants and foreign loans is reflected in this section. The mark up is charged in accordance with the terms and conditions of each loan agreement.

• 4.4.3.3 Unless specified otherwise, every loan other than foreign loan advanced by the Federal Government to the provincial governments is repayable over a period of 25 years. Moratorium of 5 years is allowed on recovery of principal. Simple mark up is realized at a rate determined annually by the Finance Division, as per actual borrowing cost of the Federal Government.

• 4.4.3.4 Federal Government also advances loans to the Government servants for house building and for the purchase of transport etc. These advances are governed by the rules as specified by Finance Division from time to time.

• 4.4.3.5 Detail of statistics of Mark-up is given in Tables 12-19

TABLE 12 Mark Up Receipts (Provinces)

(Rs. In Million)

Loan-Wise Break Up

(Rs. In Million)

TABLE 13

Mark Up Receipts (Local Bodies)

TABLE 14

Mark Up Receipts (Financial Institutions)

(Rs. In Million)

TABLE 15 Mark Up Receipts (Non-Financial Institutions)

(Rs. In Million)

(Rs. In Million)

TABLE 16 Mark Up Receipts

(Government Servants)

TABLE 17 Mark Up Receipts (AJK & Others)

(Rs. In Million)

TABLE 18

Mark Up Receipts (Others)

(Rs. In Million)

TABLE 19

Summary of Mark Up (Provinces, PSEs & Others)

4.4.4 Dividends on Government Investments

• 4.4.4.1 Dividends represent return on Federal Government's investment in the share capital of financial and non-financial institutions. The receipt of dividends varies from year-to-year depending upon profits earned by these entities.

• 4.4.4.2 The details of the estimates are given in table below:

TABLE 20 DIVIDENDS

*** Including BESOS**

4.5 Receipts from Civil Administration and Other Functions 4.5.1 These receipts comprise of General Administration Receipts, Defence Services Receipts, Law and Order Receipts, Community Services Receipts and Social Services Receipts. Revised Estimates 2024-25 and Budget Estimates 2025-26 are given below:

TABLE 21

Receipts from Civil Administration and Other Functions

4.5.2 General Administration Receipts

4.5.3 Organs of State

4.5.3.1 These receipts are realized on account of fees received from the candidates appearing in various competitive examinations conducted by Federal Public Service Commission (FPSC) and receipts of Election Commision of Pakistan under Elections Act, 2017. Estimates of receipts on this account are given below:-

TABLE 22 Receipt from Civil Adminstration- Organs of State

(Rs. In Million)

4.5.4 Fiscal Administration

• 4.5.4.1 Audit Fee - The department of the Auditor General of Pakistan charges fee from autonomous bodies/corporations etc. which do not fall within its normal audit jurisdiction, for auditing their accounts.

• 4.5.4.2 State Bank of Pakistan Receipts- The surplus profit of the State Bank of Pakistan is transferred to the Federal Government in the light of Section 42 SBP (Amendment) Act, 2022.

• 4.5.4.3 Pakistan Mint Receipts - Pakistan Mint's receipts are mainly from the disposal of dross & scrap and from minting of medals for defence services, sports and academic institutions etc.

• 4.5.4.4 Pension and Gratuity Contribution - These receipts pertain to pension and gratuity contributions by the borrowing departments in respect of officials serving on deputation basis. The estimates of receipts from fiscal administration are given below:

TABLE 23 General Administration Receipt - Fiscal Adminstration

(Rs. In Million)

4.5.5.1 The receipts on this account largely comprise of insurance fee realized under Insurance Ordinance, 2000. The estimates are given below:

TABLE 24 General Administration Receipt - Economic Regulations

(Rs. In Million)

TABLE 25

General Administration Receipt Economic Statistics

(Rs. In Million)

4.5.6

Defence Services Receipts

4.5.6.1 These receipts are realized mainly on account of dues from civil agencies, sale & auction of obsolete stores and charges realized on account of use of army aviation facilities, hospital stoppages roll and receipt of Govt. share out of the fees paid by civil patients treated in Military Hospitals etc.

• 4.5.6.2 The estimates of defence receipts are given below :-

TABLE 26 Defence Services Receipts

(Rs. In Million)

4.5.7 Law and Order Receipts

• 4.5.7.1 These receipts represent the proceeds from fines imposed by Insurance Appellate Tribunals, Federal Services Tribunals, Income Tax Tribunals, Drug Courts and Special Judges under the administrative control of Law and Justice Division. These also include fines, fees and recoveries of the Supreme Court of Pakistan, Civil Armed Forces and Frontier Watch & Ward. The fees realized on account of issuance and renewal of arms licenses by the Ministry of Interior & Narcotics Control are also reflected under this classification.The estimates of receipts from law and order are given as under:

TABLE 27

Law and Order Receipts

(Rs. In Million)

4.5.8 Community Services Receipts

4.5.8.1 The receipts under community services comprise of rent of government buildings, land, guest houses, hostels and sale proceeds of material of demolished buildings. These receipts are realized by Ministry of Housing and Works, Ministry of National Health Services Regulations and Coordination, and Ministry of Interior and Narcotics Control (Frontier Corps). The receipts realized by Survey of Pakistan for its services and supply of maps are also included here. Details of the estimates are given below:-

TABLE 28

Community Services Receipts

4.5.9 Social Services Receipts

4.5.9.1 The receipts under this head are realized on account of fees charged from students of the educational institutions of various Ministries and Divisions. The entry fee for historical places and archeological sites is collected by National Heritage & Culture Division. The charges for medical services are realized by the Federal Government hospitals and health establishments. The estimates are given in the following table:

TABLE 29

Social Services Receipt

(Rs. In Million)

4.5.10 Social Services Misc Receipts

• 4.5.10.1 Under Social Services Miscellaneous Head, the Emigration Fee deposited by Pakistani workers working abroad in terms of Emigration Ordinance, 1979 is reflected. The receipts of OP&HR Division on account of registration of overseas employment agencies and deposits by individuals for protection of their visas are also collected under this head. The details are given in the following table:

TABLE 30 Social Services Miscellanenous Receipts

(Rs. In Million)

• 4.6 Miscellaneous Receipts 4.6.1 Miscellaneous receipts comprise of (i) Economic Services Receipts (ii) Extraordinary Receipts (iii) Others Receipts. A brief description of these receipts is given in the following table:

TABLE 31

Miscellaneous Receipts

(Rs. In Million)

4.6.2 Economic Services Receipts

• 4.6.2.1 Economic Services Receipts comprise of Food & Agricultural, Fisheries & Animal Husbandry and Other receipts. A brief description of these receipts is given in the following paragraphs and related statistics are given in Tables 32-34:

• 4.6.2.2 Food and Agricultural Receipts are mainly realized on account of fee for plant protection services and fee associated with registration, enlisting and renewal of seed varieties by National Food Security and Research Division.

TABLE 32 Economic Services Receipts - (Food & Agriculture Receipts)

(Rs. In Million)

• 4.6.2.3 Fisheries & Animal Husbandry Receipts are mainly realized on account of quarantine fee on animal exports/imports by National Food Security & Research Division.

TABLE 33

Economic Services Receipts-(Fisheries & Animal Husbandry)

(Rs. In Million)

• 4.6.2.4 Receipts from Explosive Department pertain to the fee charged by the Department of Explosives for granting licenses to the firms dealing in explosives. The receipts of Explosive Department are charged for industrial safety.

• 4.6.2.5 Receipts from Lighthouses and Lightships comprise of :-

  • (i) Examination fee, survey and registration fees realized by the Mercantile Marine Department, Karachi,

  • (ii) cargo shipping and discharging fees from the shipping companies,

  • (iii) fines realized from seamen for offences committed by them,

  • (iv) fees realized from cadets under training in the Mercantile Marine Academy, Karachi, Seamen's Training Centre, Karachi and,

  • (v) Lighthouse dues realized from the shipping companies operating on the coasts of Pakistan. These receipts are shown under transportation and communication heads.

• 4.6.2.6 Receipts from Post Office mail operation pertain to services charges against the domestic and international mail services.These not only inlude the delivery of ordinary letters and parcels but also value added services like Express Mail Service(EMS) and Cash on Delvery(COD).

TABLE 34

Economic Services Receipts-Others

TABLE 35 Foreign Grants

(Rs. In Million)

4.6.3 Extraordinary Receipts

• 4.6.3.1 These receipts are realized by different Ministries, Divisions and Departments. The brief introduction of the main regular receipts under these heads are given as under with a relevant statistics in Tables 36

• 4.6.3.2 Kartarpur Corridor service charges are collected from Pilgrims in lieu of services. 4.6.3.3 National Database and Registration Authority (NADRA) is responsible for the development and establishment of an improved and modernized system of registration in the country through appropriate means including technologically advanced,effective and efficient means like computerization,automation,creation of data base and related facilities and services.It charges fee for providing services to the public. NADRA is required to remit any surplus receipt over the actual expenditure in a year after payment of tax.

• 4.6.3.4 Pakistan Civil Aviation Authority (PCAA) is responsible for the regulation and control of civil aviation activities in the country. The authority is also responsible for the development of infrastructure for promotion of safe, efficient, adequate, economical and properly coordinated civil air transport service. The authority charges licensing fee, service charges etc. in lieu of provision of different services to the public.

• 4.6.3.5 The major portion of receipts comes from United Nations (UN) in lieu of services rendered by Pakistani troops taking part in various peacekeeping operations worldwide.The other receipts are generated by various staff welfare initiatives and accreditation services.

• 4.6.3.6 The Budget Estimates & Revised Estimates for the FY 2024-25 and Budget Estimates for FY 202526 are given in Table below.

TABLE 36

Extraordinary Receipts

(Rs. In Million)

4.6.4 Other Receipts

• 4.6.4.1 These receipts are realized by different Ministries, Divisions and Departments. The brief introduction of the main regular receipts under this head is given as under with a relevant statistics in Tables 37-38:

• 4.6.4.2 Citizenship, Naturalization and Passport Fees ,are realized mainly by the Immigration & Passport Offices in Pakistan and Pakistani Missions abroad on account of issuance, renewal and endorsement of passports and visas.

TABLE 37

Citizenship, Naturalization, Passport and Copyright Fees

(Rs. In Million)

• 4.6.4.3 Royalty, Pollution and Tracking Fees From Tourists is charged from the tourists coming to Pakistan for climbing the mountain peaks.

• 4.6.4.4 Receipts from Tourism Department is include Licenses Fee of Hotels, Restaurants and Travel Agencies, Registration Fee of Hotels and Restaurants, Licenses Renewal fee of Hotels, Restaurants and Travel Agencies and the Fines/Late fee of Hotels, Restaurants and Travel Agencies within Capital Territory by Ministry of Interior.

• 4.6.4.5 Receipts Collected by Ministry of Foreign Affairs is realized on the auction of vehicles, sale of used machinery and equipment, gains on exchange against the remittances made by the Government for the expenditure of the Pakistan's missions in various countries, recovery of overpayment made to the Government servants posted abroad and the deduction of income tax, GP Fund, Benevolent Fund, House Building and Motor Car Advances of the employees posted in various Pakistan's missions abroad.

• 4.6.4.6 Receipts from Special Communications Organization are collected by the Special Communications Organization for providing telecommunication services in specific areas. The Special Communications Organization primarily operates in the Azad Kashmir and Gilgit-Baltistan.

TABLE 38

Details of Other Receipts

contd….

(Rs. In Million)

4.6.5 Receipts from Oil and Gas Sector

• 4.6.5.1 The receipts from Oil and Gas sector are realized on account of Levies, Development Surcharges and Royality on Oil and Gas. Brief introduction of these receipts are given as under and related statistics are given Table 39:

4.6.5.2 Petroleum Levy

• 4.6.5.2.1 Petroleum Products (Petroleum Levy) Ordinance, 1961 amended from time to time, provides imposition of Petroleum Levy. Ex-refinery/import price of oil is added with Inland Freight Equalization Margin (IFEM), Oil Marketing Companies (OMCs) distribution margin and dealer's commission as fixed by Government of Pakistan in Rs/per liter. On this accumulated price of oil, Petroleum Levy is fixed by Government of Pakistan in Rs. per liter from time to time.

• 4.6.5.3 Natural Gas Development Surcharge

• 4.6.5.3.1 As per Natural Gas Development Surcharge Ordinance,1967, every company as mentioned in the Schedule shall collect and pay to the Federal Government a development surcharge equal to the differential margin i.e the amount by which the fixed sale price exceeds the prescribed price, in respect of natural gas sold by it.

4.6.5.4 Royalty on Oil and Gas

• 4.6.5.4.1 According to Article 161(1)(a) of the Constitution of Islamic Republic of Pakistan, the royalty collected by the Federal Government shall not form part of the Federal Consolidated Fund and shall be paid to the provinces in which the well-head of natural gas is situated. As per clause 5 of 7th National Finance Commission Award notified vide President's Order No.5 of 2010, each of the provinces shall be paid in each financial year as a share in the net proceeds of the total royalties on crude oil an amount which bears to the total net proceeds in the same proportion as the production of crude oil in the province in that year bears to the total production of crude oil.

• 4.6.5.4.2 Petroleum Exploration & Production Policy 2012 approved by Ministry of Petroleum & Natural Resources Government of Pakistan imposes Royalty on exploration and production of oil and gas. Clause 4.1 of Section II of the said policy provides that royalty will be payable at the rate of 12.5% of the value of petroleum at the field gate. The royalty will be paid by the Federal Government to Provinces to the extent of their share of liquid and gaseous hydrocarbons (such as LPG, NGL, Solvent oil, gasoline and others) as well as all substances including sulphur, produced in association with such hydrocarbon. The lease rent paid during the year shall not be deductible from the royalty payment. A 10% of the royalty will be utilized in the district where oil and gas is produced for infrastructure development.

4.6.5.5 Discount on Local Crude Oil

• 4.6.5.5.1 Crude Oil and Natural Gas is explored/extracted by the Exploration and Production (E&P) Companies working under "Petroleum Concession Agreement (PCA)". E&P companies sell the crude oil to refineries at the rate prevailing in the international market based on the formula as per PCA. Under various agreements, E&P companies agree to sell the crude oil to refineries at different discounted rate on attainment of certain milestones as per PCA. The amount of discount is retained by the refineries while making payment of crude oil to E&P companies and deposited in Government head of account.

4.6.5.6 Windfall Levy on Crude Oil & Natural Gas

• 4.6.5.6.1 As per Petroleum Exploration & Production Policy 2012, Windfall Levy (WLO) will be applicable on crude oil and condensate using the formula i.e WLO = 0.4 x (M-R) x (P-B) Where: WLO = Windfall Levy on crude oil and condensate; M = Net production (petroleum produced & saved); R = Royalty; P = Market Price of crude oil and condensate; and B = Base Price. All the benefit of windfall levy may be equally divided between the Federal Government and Provincial Government concerned.

• 4.6.5.7 Gas Infrastructure Development Cess (GIDC)

• 4.6.5.7.1 Gas Infrastructure Development Cess Act 2015 provides legal framework to levy and collect the Cess from gas consumers other than the domestic sector consumers at the rates as provided in the Second Schedule to this Act. The gas company shall be responsible for billing of cess to gas consumers, its collection and its onward payment to Federal Government in the manner as prescribed by the Federal Government. As per Section 4 of the Act, the cess shall be utilized by the Federal Government for or in connection with infrastructure development of Iran Pakistan Pipeline Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project, and LNG or other ancillary projects.

• 4.6.5.7.2 The major billing companies are: (1) Sui Northern Gas Pipelines Limited, (2) Sui Southern Gas Company Limited, (3) Mari Petroleum Company Limited (formerly Mari Gas Company Limited),(4) Pakistan Petroleum Limited, (5) Tullow Pakistan Development Limited, (6) Oil and Gas Development Company Limited. Rates of Cess (Rs./MMBTU) are Rs. 300 for Fertilizer Feed, Rs. 200 for Captive Power, Rs. 100 for Industry, Rs. 100 for KESC/GENCO, Rs. 100 for IPPs, Rs.263 for CNG Region-I and Rs. 200 for CNG Region-1

TABLE 39 Receipts from Oil and Gas Sector (Rs. In Million)

Chapter 5: ROVINCIAL SHARE IN REVENUE RECEIPTS

• 5.1 The provincial share of revenues from the divisible pool taxes, straight transfers etc. is governed in accordance with the provisions of 7th National Finance Commission Award notified vide President's Order No.5 of 2010 issued on 10th May, 2010, which is reproduced as under:

PRESIDENT'S ORDER NO.5 OF 2010

AN ORDER

to provide for distribution of revenues and certain grants

WHEREAS in pursuance of clause (1) of Article 160 of the Constitution of the Islamic Republic of Pakistan (hereinafter referred to as the Constitution), the President, by the Finance Division's Notification No.S.R.O. 739(I)/2005 dated 21st July, 2005, as modified by the said Division's Notification No.S.R.O.693(I)/2009, dated 24th July, 2009, appointed a National Finance Commission to make recommendations, among other matters, as to the distribution between the Federation and the Provinces of the net proceeds of certain taxes;

AND WHEREAS the said Commission has also submitted its recommendations with regard to the said distribution;

NOW, THEREFORE, in pursuance of clauses (4) and (7) of Article 160 of the Constitution, the President is pleased to make the following Order:-

1. Short title and commencement: (1) This Order may be called the Distribution of Revenues and Grant-in-Aid Order, 2010.(2) It shall come into force on the first day of July, 2010.

2. Definitions: In this Order, unless there is anything repugnant in the subject or context.---

• (a) "Net Proceeds" means, in relation to any tax, duty or levy, the proceeds thereof reduced by the cost of collection as ascertained and certified by the Auditor General of Pakistan, and

• (b) "taxes on income" includes corporation tax but does not include taxes on income consisting of remuneration paid out of the Federal Consolidated Fund.

3. Distribution of Revenues.

(1) The divisible pool taxes in each year shall consist of the following taxes levied and collected by the Federal Government in that year, namely:-

• (a) taxes on income;

• (b) wealth tax;

• (c) capital value tax;

• (d) taxes on sales & purchases of goods imported, exported, produced, manufactured or consumed;

• (e) export duties on cotton;

• (f) customs duties;

• (g) federal excise duties excluding the excise duty on gas charged at well-head; and

• (h) fany other tax which may be levied by the Federal Government.

(2) One percent of the net proceeds of divisible taxes shall be assignedto Government of the Khyber Pakhtunkhwa to meet the expenses on War on Terror.

(3) After deducting the amount as prescribed in clause (2), of the balance amount of the net proceeds of divisible pool taxes, fifty six percent shall be assigned to the provinces during the financial year 2010-11 and fifty seven and a half percent from the financial year 2011-12 onwards. The share of the Federal Government in the net proceeds of the divisible pool shall be forty-four percent during the financial year 201011 and forty -two and half percent from the financial year 2011-12 onwards.

(3) The Federal Government shall guarantee that Balochistan Province shall receive the projected sum of eighty-three billion rupees from the provincial share in the net proceeds of divisible pool taxes in the first year of the Award. Any shortfall in this amount shall be made up by the Federal Government from its own resources. This arrangement for Balochistan shall remain protected throughout the remaining four years of the Award based on annual budgetary projections.

5. Payment of net proceeds of royalty on crude oil : Each of the Provinces shall be paid in each financial year as a share in the net proceeds of the total royalties on crude oil an amount which bears to the total net proceeds the same proportion as the production of crude oil in the Province in that year bears to the total production of crude oil.

6. Payment of net proceeds of development surcharge on natural gas to the provinces : (1) Each of the Provinces shall be paid in each financial year as a share in net proceeds to be worked out based on average rate per MMBTU of the respective province. The average rate per MMBTU shall be derived by notionally clubbing both the royalty on Natural Gas and Development Surcharge on Gas. Royalty on natural gas shall be distributed in accordance with clause (1) of Article 161 of the Constitution whereas the development surcharge on natural gas would be disrtributed by making adjustments based on this average rate.

(2) The development surcharge on natural gas for Balochistan with effect from Ist July, 2002 shall be reworked out hypothetically on the basis of formula given in clause (1) and the amount, subject to maximum of ten billion rupees, shall be paid in five equal installments by the Federal Government as grants to be charged on the Federal Consolidated Fund.

7. Grants-in-Aid to the Provinces: There shall be charged upon the Federal Consolidated Fund each year, as grants-in-aid of the revenues of the province of Sindh an amount equivalent to 0.66% of the provincial share in the net proceeds of divisible pool as a compensation for the losses on account of abolition of octroi and zila tax.

8. Sales Tax on services: NFC recognizes that sales tax on services is a Provincial subject under the Constitution of the Islamic Republic of Pakistan, and may be collected by respective Provinces, if they so desired.

9. Miscellaneous: (1) NFC also recommended increase in the rate of excise duty on natural gas to Rs. 10.0 per MMBTU. Federal Government may initiate necessary legislation accordingly.

(2) The NFC recommended that the Federal Government and Provincial Governments should streamline their tax collection systems to reduce leakages and increase their revenues through efforts to improve taxation in order to achieve a 15% tax to GDP ratio by the terminal year i.e. 2014-15. Provinces would initiate steps to effectively tax the agriculture and real estate sector. Federal Government and Provincial Governments may take necessary administrative and legislative steps accordingly.

(3) Federal Government and Provincial Governments would develop and enforce mechanism for maintaining fiscal discipline at the Federal and Provincial levels through legislative and administrative measures.

(4) The Federal Government may assist the Provinces through specific grants in times of

unforeseen calamities.

(5) The meetings of the NFC may be convened regularly on a quarterly basis to monitor implementation of the award in letter and spirit.

10. Repeal.- The Distribution of Revenues and Grant-in-Aid Order, 1997 (P.O.No.1 of 1997), and the Distribution of Revenues and Grants-in-Aid, Order, 2010. (P.O. 4 of 2010) are hereby repealed.

ASIF ALI ZARDARI President

• 5.2 Distribution of Revenues and Grants-in-Aid Order, 2010 (President's Order No. 5 of 2010) was slightly amended through President's Order No.6 of 2015, which is reproduced as under;

PRESIDENT'S ORDER NO.6 OF 2015

AN

ORDER

To amend Distribution of Revenues and Grants-in-Aid Order, 2010 (President's Order No.5 of 2010)

Whereas it is expedient to amend the Distribution of Revenues and Grants-in-Aid Order, 2010 (P.O. No. 5 of 2010) for the purpose hereinafter appearing.

Now therefore in pursuance of clause (6) read with clause (7) of Article 16 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make the following Order:-

1. Short title and commencement: (1)This Order may be called the Distribution of Revenues

and Grants-in-Aid (Amendment) Order 2015.

• (2) It shall come into force on the first day of July 2015.

• (3) It will remain in force till further orders.

2. Substitution of Article-4(3) P.O No.5 of 2010: In the Distribution of Revenues and Grants-in-

Aid Order, 2010 (P.O. No. 5 of 2010) for Article 4(3) the following shall be substituted;

3. The Federal Government shall guarantee that Balochistan Province shall receive the

MAMNOON HUSSAIN President

• 5.3 The following table shows the estimated transfers to the provincial governments on account of their share in Federal Taxes and by straight transfers during FY2024-25 and FY2025-26:

TABLE 40

Provincial Share in Revenue Receipts

2024-25 (Budget)

TABLE 41 Provincial Share in Revenue Receipts 2024-25 (Revised)

TABLE 42

Provincial Share in Revenue Receipts 2025-26 (Budget)

Chapter 6: CAPITAL RECEIPTS

• 6.1 Capital receipts comprise of Recoveries of Loans and Advances from Provinces and other entities and Public Debt which includes Permanent Debt and Floating Debt. External finances and unfunded debt (primarily made up of the various instruments available under the National Savings Schemes) also fall under the category of Capital Receipts, however, they are covered under separate chapters of this publication.

• 6.2 The following table indicates the position of capital receipts for 2024-25 (Budget and Revised) and 2025-26(Budget).

TABLE 43

Capital Receipts

(Rs. In Million)

6.3 Recovery of Loans and Advances

• 6.3.1 The recovery of principal amount of loans and advances from provinces, public sector enterprises, financial and non-financial institutions is reflected in this section.

6.3.2 The estimates of recoveries of loans and advances are given below:

TABLE 44

Recovery of Loans and Advances

(Provinces)

(Rs. In Million)

Loan-wise Break-up

(Rs. In Million)

TABLE 45

Recovery of Loans and Advances

(Local Bodies)

TABLE 46

Recovery of Loans and Advances (Financial Institutions)

(Rs. In Million)

TABLE 47

Recovery of Loans and Advances

(Non-Financial Institutions)

(Rs. In Million)

TABLE 48

Recovery of Loans and Advances (From Government Servants)

(Rs. In Million)

TABLE 49 Recovery of Loans and Advances (Others)

(Rs. In Million)

TABLE 50 Summary of Recovery of Loans and Advances

(Rs. In Million)

6.4 Public Debt 6.4.1 Public Debt of the Federal Government is classified into two categories:

• (i) Domestic Debt , which includes Permanent Debt,Floating Debt and Unfunded Debt:and

• (ii) Foreign Currency Debt , which includes long, medium and short term debt.

TABLE 51 Public Debt (Net)

(Rs. In Million)

6.4.2 Domestic Debt (Permanent) 6.4.2.1 The main features of securities through which domestic debt (permanent) is raised are given below:

6.4.2.2 Pakistan Investment Bonds

This security having maturity period of 2, 3, 5, 7, 10, 15, 20 and 30 years is in operation since 2000. Against the budgeted receipt of Rs. 204,686 million for the year 2024-25, the revised estimates for the year 2024-25 have been worked out at Rs. 314,830 million whereas the budget estimates for the year 2025-26 are estimated at Rs. 147,395 million.

6.4.2.3 Government Ijara Sukuk Bonds

The Government of Pakistan Ijara Sukuk Bonds are issued through Pakistan Domestic Sukuk Company Limited. The Sukuk are not redeemable before maturity. The profit on the Sukuk is payable bi-annually on rental rate to be announced by State Bank of Pakistan. Against the budget estimates of Rs. 2,313,469 million for the year 2024-25, the revised estimates have been projected at Rs. 1,127,245 million. The budget estimates for the year 2025-26 are estimated at Rs. 1,100,000 million.

6.4.2.4 The net receipts from domestic debt (permanent) during the year 2024-2025 (Budget & Revised) and 2025-2026 (Budget) are estimated as under:-

TABLE 52

Domestic Debt (Permanent)-Net

(Rs. In Million)

6.4.3 Foreign Currency Debt 6.4.3.1 It includes the following securities:

6.4.3.2 Foreign Exchange Bearer Certificates (FEBCs)

Budget estimates in case of repayment of Foreign Exchange Bearer Certificates for financial year 2024-25 were estimated at Rs. 5.000 million. Revised estimates for the year 2024-25 are projected at Rs. 0.100 million whereas budget estimates for financial year 2025-26 have been kept at Rs. 1.000 million.

6.4.3.2 Foreign Currency Bearer Certificates (FCBCs)

Repayment on account of Foreign Currency Bearer Certificates in the budget estimates for the year 2024-25 was estimated at Rs. 5.000 million. Revised estimates for the year 2024-25 and budget estimates for the year 2025-26 on account of repayment have been kept at Rs.0.100 million and Rs.1.000 million respectively. These certificates are in US$ and Pound Sterling. Profit is payable half yearly at floating rates which is not liable to income tax. Investment in these certificates is exempt from Wealth Tax and compulsory deduction of Zakat.

6.4.3.3 US Dollar Bearer Certificates (DBCs)

This security was introduced in 1991 and discontinued on 17th November, 1994. Against the repayment of Rs. 3.000 million in the budget estimate 2024-25, revised estimates in 2024-25 and budget estimates for the year 2025-26 have been kept at Rs. 0.100 million and Rs.1.000 million respectively.

6.4.3.4 Special US Dollar Bonds

These bonds were issued under Special US Dollar Bonds Rules, 1998 to the Foreign Currency Accounts holders or Foreign Currency Certificates holders with scheduled banks or non-bank financial institutions out of their foreign currency deposits. Against the repayment of Rs. 50.000 million provided in budget estimates 2024-25, the repayment on account of these bonds in revised estimates 2024-25 has been estimated at Rs.30.000 million and the repayment of budget estimates for the year 2025-26 are estimated at Rs.30.000 million. The estimates of foreign currency debt (permanent) are tabulated below:-

TABLE 53

Foreign Currency Debt(Permanent)- Net

6.4.4 Floating Debt

• 6.4.4.1 The term "Floating Debt" is applied to borrowing of purely temporary nature with currency of not more than twelve monts.Market Related Treasury Bills,National prize Bonds and Bai-Maujjal Ijara Sukuks are included in this category.

6.4.4.2 Market Related Treasury Bills (Auction)

These reflect non-bank borrowing of the Federal Government.

6.4.4.3 National Prize Bonds:

These are of bearer type non-terminable securities freely en-cashable and transferable by delivery. These are issued in denomination of Rs.100/-, Rs.200/-, Rs.750/-, Rs.1,500/-, Rs.7,500/-, Rs.15,000/-, Rs.25,000/and Rs.40,000/-. Recently Prize Bonds amounting to Rs.7,500/,Rs.15,000/-,Rs.25,000/- and Rs.40,000/- have been converted from Bearer into Registered Pize Bonds and data for conversion has been extended by Finance Division with consultation of State Bank of Pakistan. The budget net figure (receipts minus repayments) for the year 2024-25 was kept at Rs.2,176 million, the revised estimates for the year 2024-25 are kept at Rs. 11,469 million and budget estimates for the year 2025-26 are estimated at Rs.12,562 million.

6.4.4.4 Government Bai-Muajjal Ijara Sukuk

Government Bai-Muajjal Ijara Sukuk are issued through auction for a maturity period of one year from date of issue. Bai-Muajjal Ijara Sukuk shall be repaid only on maturity. The profit earned on BaiMuajjal Ijara Sukuk shall be liable to income tax. Withholding tax shall be deducted at source at the applicable rate. The estimates of receipts for floating debt during the year 2024-25 (Revised) and 2025-26 (Budget) are as under:-

TABLE 54

Floating Debt (NET)

(Rs. In Million)

Chapter 7: PUBLIC ACCOUNT RECEIPTS

• 7.1 Article 78(1) of the Constitution of Islamic Republic of Pakistan provides that all revenues received by the Federal Government, all loans raised by that Government and all moneys received by it in repayment of loan, shall form part of the Federal Consolidated Fund. Article 78(2) provides that all other monies received by or on behalf of the Federal Government shall be credited into the Public Account of the Federation. Therefore, all the monies received by or on behalf of the Federal Government in terms of Article 78(2) are Public Account receipts which are not revenues in terms of Article 78(1) of the Constitution. However, such Public Account receipts cannot be operated without establishment of Special Purpose Funds, deposits, reserves etc under the authority of an Act of the Parliament or with the approval of the Federal Government. Moreover, as per Section 32 of the Public Finance Management Act, 2019, Special Purpose Funds, in which monies have been appropriated by the National Assembly shall be established under any law or with the approval of the Federal Government.

7.2 Public Account Receipts may be categorized as Deferred Liabilities and Deposits & Reserve.The Revised and Budget Estimates of Public Accounts Receipts (Net) are given in Tbale 55.

TABLE 55 Public Account Receipts (Net)

(Rs. In Million)

7.3 Deferred Liabilities 7.3.1 These receipts represent the net proceeds of various savings schemes launched by the Government. Brief introduction of each saving scheme is given below.

7.3.2 Defence Savings Certificates

This is a ten years scheme. However, the investment can be encashed at any time. The rate of return on Defence Savings Certificates has been linked with the yield of Pakistan Investment Bonds of ten years maturity. The existing rate on this scheme is 11.90 % p.a. on maturity. Withholding tax is deducted from the profit payment. Apart from the individuals, institutions may invest their individuals' funds such as pension, gratuity, superannuation, contribtory provident funds and trusts etc.in this scheme.

7.3.3 Special Savings Certificates

Special Savings Certificates (Registered/Accounts) is a three years scheme with profit payable on six monthly basis. The rate of return on Special Savings Certificats/Accounts has been linked with the yield of Pakistan Investment Bonds of three years maturity.The existing rate of profit in this scheme is 10.90% per annum for first to fifth profits and 11.90 % for the last sixth profit. While average rate is 11.07 %. Withholding tax is deducted from the profit payment. Apart from individuals, institutions may invest their individuals' funds such as pension, gratuity, superannuation, contribry provident funds and trusts etc.in this scheme.

7.3.4 Regular Income Certificates

• This scheme was introduced on 02-02-1993 to ensure payment of income on monthly basis. The rate of return on Regular Saving Certificates has been linked with the yield of Pakistan Investment Bonds of five years matuarity. The existing profit on this scheme is 11.52 % per annum. The profit in this scheme is subject to withholding tax and the investment is exempt from compulsory deduction of zakat at source. Apart from individuals, institutions may invest their individuals' funds such as pension, gratuity, superannuation, contributory provident funds and trusts etc.in this scheme.Premature encashment on these certificates carry service charges as under:-

This is the oldest saving scheme in operation which provides profit on non-checking accounts.Zakat is deducted @ 2.50 % on credit balance on valuation date each year if declaration in this regard is not filed.The existing profit on savings account is 9.50% p.a. Withholding tax is deducted from the profit payment. Apart from individuals, institutions may invest their individuals' funds such as pension, gratuity, superannuation, contributory provident funds and trusts etc.in this scheme.

7.3.6 Pensioners’ Benefit Accounts

This scheme has been launched with effect from 20-1-2003 to provide incentives to the retired officials of the Federal Government, Provincial Governments, Azad Government of the State of Jammu and Kashmir, Armed Forces, Semi Governments and Autonomous Bodies and in case of death the pensioner’s eligible member of the family. Only one account can be opened in the National Savings Centre with a minimum deposit of rupees ten thousand and in multiple of one thousand with the facility of seven subsequent deposits subject to the maximum limit of five million rupees. It is a ten years scheme and profit is payable on completion of each period of one month reckoned from the date of opening of an account till maturity or encashment whichever is earlier. The existing rate of profit on this scheme is 13.44 % per annum. Premature encashment before completion of one, two, three and four years carries service charges at the rate of 1.00%, 0.75%, 0.50% and 0.25% of principal amount respectively. Profit accrued from this scheme is exempt from compulsory deduction of withholding tax and Zakat. The scheme has been made more attractive as any upward revision in rate of profit notified after 09.03.2009 shall also be applicable to existing accounts holders whereas downward revision shall also be apply to fresh investment only.

7.3.7 Bahbood Savings Certificates

Initially this scheme was introduced exclusively widows to cater for their needs with monthly profit payment facility. The scheme was further extended to the persons of age 60 years or above. The existing rate of profit on this scheme is 13.44 % per annum. The maximum investment limit in this scheme is five million rupees and ten million rupees for joint holders. It is only a compensatory package to enable widows and senior citizens to supplement their income to lead a respectable life. Service charges at the rate of 1.00%, 0.75%, 0.50% and 0.25% of the face value are deducted if certificates are encashed before completion of one, two, three and four years respectively. Profit accrued from this scheme is exempt from compulsory deduction of withholding tax and Zakat.The scheme has been made more attractive as any upward revision in rate of profit notified after 09.03.2009 shall also be applicable to existing certificate holders whereas downward revision shall apply to frash investment only.

7.3.8 Premium Prize Bonds (Registered):

Premium Prize Bonds (Registered) of Rs.40,000/- denomination have been launched. These bonds offer biannual profit payment on completed period of six months i.e. 2.92% (biannual) as well as prize money on quarterly draws. The bond shall be registered against the name of purchaser. The ownership of bond is transferable from one person to another person through an application on prescribed format.

7.3.9 Shuhada's Family Welfare Account (SFWA)

A new savings scheme, namely Shuhada Family Welfare Account (SFWA), for the welfare of eligible family members of Shuhada (martyrs) has been launched on 11th May, 2018. The eligible family members can open the SFWA account in any National Savings Centre across Pakistan after fulfillment of required documentation. Preferential profit in line with the existing welfare product i.e., Bahbood Savings Certificate and Pensioner Benefit Account shall be paid to the investor of SFWA on monthly basis. Current profit rate is 13.44 % . Profit shall be exempted from Withholding Tax and compulsory deduction of Zakat.

7.3.10 The Budget estimates of Deferred Liabilites on account of National Savings Schemes (Net)are reported in below table:-

TABLE 56 Deferred Liabilities (Net)

7.4 Deposits and Reserves

Deposits and Reserves represent all form of monies on the part of the Public Account of the Federation as per Article 78(2) of the Constitution of Islamic Republic of Pakistan. The estimates in table 46 are, however, subject to fulfillment of following stipulations:

• (i) The funds appropriated by the National Assembly out of Federal Consolidated Funds in terms of Articles 80 to 84 of the Constitution for a particular financial year (being lapsable) shall not be deposited under these deposits and reserves heads of account (being non-lapsable) under the Public Account.

• (ii) The maintenance and operation of all these funds, deposits, reserves etc shall be subject to their due establishment either under the authority of an Act of Parliament or with the approval of the Federal Government, as the case may be.

• (iii) Revenues as per Article 78(1) of the Constitution shall not be deposited in these deposits and reserves heads of account under the Public Account. The revenues shall be deposited in the respective heads of account of tax revenue and non tax revenue.

• (iv) Receipt and withdrawal of funds into/from these deposits and resreves heads of account shall only be allowed by the Accounting Offices subject to compliance of the stipulations at (i) to (iii) above and to the extent of reconciled available balance under the respective head of account.

TABLE 57

Deposits and Reserve Fund