Government employees to get 11 pc raise in salaries: Dar

ISLAMABAD: Finance Minister Ishaq Dar on Thursday announced changes in the taxation proposals for the next fiscal year, claiming to provide relief to industry, agriculture and IT sectors and for civil servants.
Winding up the eight-day-long budget debate in the National Assembly, Finance Minister Ishaq Dar announced several changes in taxation proposals in the light of the proposals coming from the Senate and members of the National Assembly.
The minister said the federal government employees would get 7.5% ad hoc increase in their salaries after the merger of two ad hoc increases in their basic pay as already announced and this would mean about 11% increase in their salaries and about Rs2 billion additional burden on the national exchequer.
He announced a lucrative package of incentives to encourage manufacturing of mobile phones in the country. Under the package, cellular phone manufacturing units, which will be established during July 1, 2015 to June 2018, would be exempted from income tax for five years. “They would also get 90% depreciation allowance on plants and machinery during the first year of operation. All plants, machinery and assembly line equipment meant for cellular phone manufacturing in Pakistan will get customs duty and sales tax exemption as well,” he added.
He told the National Assembly that all new manufacturing units to be established in Balochistan from July this year to June 2018 would get five income tax exemptions. “These units will also be exempted from turnover tax,” he said and added that like Khyber-Pukhtunkhwa, export of perishable items (food items) to Afghanistan from the Chaman border had also been allowed in rupees instead of dollars.
The finance minister said the federal and provincial governments would jointly institute Rs20 billion funds to provide subsidy on phosphate and potash fertiliser. He said sales tax on pesticides had been lowered from 17% to 7% while the sales tax on oilseeds is being reduced from 10 to 5% and customs duty on its import is being abolished.
He said after talks with the industry people, it has been decided to increase the federal excise duty on aerated water from 9 to 10.5% as against 12% announced during the budget speech. “However, prices would not be increased,” he added.
The minister said 56 of the 92 recommendations received from the Senate have been accommodated in the budgetary proposals — 20 have been accepted in totality, 21 partially and 15 agreed to in principle. He said the remaining 36 require implementation over the long term.
He referred to several budgetary proposals to dispel the impression that the new budget was pro-rich and not pro-poor. The minister pointed out that the proportion of indirect taxes had been reduced and direct taxes increased to ensure that there was no further burden on the common man.
He said the allocations for Benazir Income Support Programme, which were just Rs40 billion in 2013, have been increased to Rs102 billion for the next financial year. “The number of beneficiary families is expected to rise to 5 million this month and 5.3 million till June next year,” he added. The allocations for the Baitul Maal have also been increased hundred percent to Rs4 billion.
The minister said farmers’ credit scheme and crop insurance scheme have been introduced which would benefit the farming community.He clarified that out of Rs250 billion additional income from taxes, Rs120 billion would be realised by abolishing the SROs containing special concessions for the privileged sections.
Ishaq Dar said as per the announcement of Prime Minister Nawaz Sharif, the Lowari Tunnel project would be completed by December next year. He said apart from budgetary allocations, more funds would be provided to the project for its timely completion.
The minister announced that projects under the China-Pakistan Economic Corridor would be completed on a priority basis.He said the Green Line Bus Project in Karachi would be provided necessary funding for completion according to the timeline.
He also clarified that no additional tax has been imposed on edible oil and the already imposed 2% tax had been transferred from a particular schedule to the main law and therefore, there would be no increase in the prices of oil.
Similarly, he said two types of taxes 0.2% on wholesale level and 0.5% on market level on fertiliser have been merged. About an increase in taxes on import of mobile phone sets, he said tax of category one phones has in fact come down by 50 rupees; there is increase of 50 rupees for category two and 300 rupee increase for the category three mobile phones.