By News Desk
ISLAMABAD: Finance Minister Shaukat Tarin on Friday announced some adjustments in proposed taxes in the federal budget, noteworthy of which were the withdrawal of taxes on milk products, while tacking on charges for mobile phone calls which exceed five minutes. Winding up the debate on the budget at the National Assembly, the minister said the government has provided tax incentives in budget 2021-22 and has not imposed any new taxes, instead providing relief measures to the industrial sector, he said.
He said in the new auto policy, the government announced a reduction of tax on 1000 CC vehicles, while it was already reduced for 800 CC vehicles. Tarin said the government has also exempted tax on children’s milk, medicines and medical equipment and the information technology sector to grant relief to the people. He said the government has also exempted taxes on mobiles and the poultry industry, including poultry feed ingredients.
Tarin shared that speaking over mobile phones for more than five minutes will be taxed at 75 paisas, but there will be no tax on an SMS and mobile internet. “We have also provided tax relief to the construction industry during the Covid-19 and also reduced the tax from 35 to 20 per cent for them to benefit around 40 allied industries that would help increase employment in the country,” he said.
provision of relief to low-income segments and empowering the industry through multiple incentives is the major focus of the federal budget for fiscal year 2021-22.
“We want inclusive, long-term, sustainable and indiscriminate economic growth,” the minister said while highlighting that the government was committed to providing homes to six million people, ensure basic skills and healthcare with the “bottom-up approach, instead of waiting for the trickle-down effect”.
The minister said the government has prioritised some sectors of economy, including increasing exports and promoting agriculture, information technology and construction. “These sectors will help promote economic growth,” he said.
Talking about tax policies, the minister said the government had already introduced reforms in the Federal Board of Revenue (FBR) to change the system through automation of the institution and ensure transparency for achieving the annual revenue target.
He said the government has decided to introduce “universal self-assessment” for engaging a third-party approach to conduct the audit of 15 million potential taxpayers. He said the government has collected the information of these people from their electricity and other utility bills.
He said there would be no harassment for new tax filers but some measures would be taken by the government and only third parties would have the mandate to negotiate with them to settle tax issues. The Minister said the government collected Rs4.1 trillion in revenues in the first 11 months and hoped that by the end of current fiscal year (2020-21), revenue collection would increase to Rs4.7 trillion. “We have set a Rs 5.8 trillion revenue target for the coming year 2021-22,” he said.
The finance minister said the government has allocated an additional Rs25 billion for the growth of the agriculture sector. He said the government has also decided to grant Rs300,000 in loans to each farmer annually in both cropping seasons.
The minister said the housing sector was a major focus of the government and “we are providing easy loans to the people on lower interest rates for growth in the housing sector. He also said the China-Pakistan Economic Corridor (CPEC) is also a major focus of the government, adding that special economic zones related to CPEC would play the role of “catalyst” for the modernisation of the industrial sector of the country.
He said the government has also decided to boost the small and medium enterprises and Rs10 billion in loans would be provided to SMEs with 9 per cent interest. He said information technology sectors have achieved huge growth and the government has also decided to provide tax incentives to the industry after the negotiation with different stakeholders. He expected up to $8 billion in exports in the coming year in case the IT sector grows 50 per cent a year in the country.
He informed the National Assembly that the government has also increased the Public Sector Development Program (PSDP) by 40 per cent to Rs900 billion for the coming budget. Announcing the relief measure in the coming budget 2021-22, he said through the ‘Ehsaas Program’, Rs260 billion was announced for providing relief to low income people, including widows, orphans and scholarships for students.