ISLAMABAD: Finance Minister Shaukat Tarin Friday announced that there would be no increase in the power tariff, while Rs5,800 billion tax collection target would be met through automation and...
ISLAMABAD: Finance Minister Shaukat Tarin Friday announced that there would be no increase in the power tariff, while Rs5,800 billion tax collection target would be met through automation and bringing changes in the tax system.
Winding up debate on the federal budget, Tarin said the government will focus on growth strategy to create new jobs and enhance the people’s income level.
“We have achieved stability and are heading towards an inclusive and sustainable growth to create job opportunities and increase income level,” he said, adding that the IMF had also been conveyed that the government would not increase the power tariff. He said the government would address the issue of circular debt by improving recoveries and controlling line losses through better management.
Tarin said the tax imposed on medical bills and GP fund of employees was also being withdrawn, while tax imposed on milk had also been waived off.
However, he said there would be no tax on internet and SMS, while the users would be charged only 75 paisas for a call exceeding five minutes.
The minister said the government had already introduced reforms in the Federal Board of Revenue (FBT) to change the system through automation of FBR and ensure transparency for achieving revenue collection targets.
He told the House that during the first 11 months of the ongoing fiscal year, a collection of Rs4.1 trillion had been made, while Rs4.7 trillion would be collected by the end of the current month.
The finance minister said Prime Minister Imran Khan had taken bold and difficult decisions to steer economy in the right direction adding that despite the COVID-19 challenge, the country achieved four percent growth during the current fiscal year due to the interventions made by him in different sectors, including industries, housing and construction and the agriculture.
“The measures taken by the government during the COVID-19 pandemic were appreciated by the world. The government opted for smart lockdown and avoided complete lockdown so that economy continues to move,” he said.
Tarin said the government itself projected 2.1% growth, the IMF 1.3% and World Bank 2% whereas the interventions made by Prime Minister Imran Khan resulted in 4% economic growth which had gone down to 0.5%.
He also announced a series of relief measures for different sectors. He said the tax relief earlier given to the auto sector for vehicles up to 850 cc is being extended to 1,000cc vehicles, while the tax imposed on medical bills and GP fund was being withdrawn.
The minister said there would be zero tax on the registered IT platforms and only two percent for the unregistered ones.
He said there would be 17 percent tax on the value added products of gold, while tax on poultry was being reduced from 15 to 10 percent.
On textile products, the tax has been reduced from 12 to 10 percent. Similarly, tax rate on the real estate has been reduced. Under the construction package, the ratio of income tax has been reduced from 35 percent to 20 percent.
He said tax relief had also been given to oil refineries so that they could turn to Euro-5 fuel. The minister categorically stated that no tax had been imposed on flour and its products.
Tarin said the budget had given a hope to all tiers of the society. He said the budget envisaged a comprehensive plan for the uplift of four to six million poor households.
Under this plan, these households will be provided with affordable houses. The rural households will be given interest free loans of up to three hundred thousand rupees for the agriculture productivity besides two hundred thousand rupees for purchase of equipment.
He said five hundred thousand rupees of interest-free loans will be provided to each deserving household in the urban areas to start their businesses.
He said these poor households will also be provided with health cards. The minister said the allocation for Ehsaas Program had been enhanced to Rs260 billion to provide assistance to under-privileged segments of the societies.
He said the government will provide targeted subsidies to the low-income groups on power tariff, flour, ghee and sugar.
The minister said tax collection for the next fiscal year had been fixed at Rs5,800 billion.
“We are bringing changes in the tax system and introducing automation. He said 12 withholding taxes had been withdrawn as these were regressive in nature.
Tarin said the government had increased the annual PSDP by 40% from Rs630 billion to Rs900 billion.
He said projects pertaining to transport and energy as well as development of backward areas including Balochistan, Tribal Areas, Gilgit-Baltistan had been given priority in the development plan to bring prosperity and reduce poverty.
He said 1.1 billion dollars had been earmarked for purchase of anti-COVID vaccine, while Rs5 billion had been set aside for the development of E-voting system.
The minister pointed out that Pakistan had become a net food importer and the present government will now spend on the agriculture sector to achieve self-reliance.
He said a plan had been formulated in cooperation with the provinces to uplift this sector adding that cold storages and warehouses will established and a network of agri-malls will be spread across the country to eliminate the roll of middle man.
As regards the industrial sector, he said incentives of Rs40 billion will be given with an aim to increase the competitiveness of this important sector of the economy.
He said tax relief had been given to the SMEs sector and loans of Rs100 billion would be given to them on a markup of 9 percent, while the government would also be bringing with introduction of a new auto policy and “Meri Gari Scheme”.
He said the incentives given to the export-oriented industries will continue during the next fiscal year.”
“Our aim is to enhance our export base by encouraging exports in different sectors,” he said.
Tarin expressed satisfaction over the growth of IT sector, saying the government’s aim was bolster exports to 6 to 8 billion dollars in the next two to three years.
He said the government was also establishing Special Economic Zones (SEZs) under China-Pakistan Economic Corridor project. “We are engaged with China for relocation of their industries to these zones. Investment from other countries will also be brought in these SEZ,” he added.
He also announced that sufficient budget would be allocated for construction of a dam to improve water management and water reservoirs in the country.
The minister recalled that the PTI government had to approach the IMF, as it inherited 28 billion dollars current account deficit and trade deficit due to low currency and 30 billion dollars loans.
“The IMF agreed to give its programme against conditions of devaluating rupee, increasing discount rate to 13.25% and increasing electricity tariffs,” he said.
He said the government would also take care of around six million families by providing interest-free loans of Rs0.3 million to farmers and Rs0.5 million loan in urban areas. Moreover, he said the government would also enable people to own their houses.
Earlier, giving their recommendations, the opposition members asked the government to give 20 to 25 percent raise in salaries of its employees, withdraw tax on GP Fund and reduce burden of indirect taxes.
Those who spoke prior to the speech of the finance minister included Hina Rabbani Khar, Shazia Marri, Rana Tanveer Hussain, Maulana Abdul Akbar Chitrali, Mohsin Dawar and others.
The House also offered Fateha for the departed souls of FC soldiers in a terror act in Sibbi.
The opposition members while discussing charged expenditures for different ministries and Institutions said it was budget by rich and for the rich.
On charged expenditures of Rs2.38 billion for the National Assembly, PPP’s Abdul Qadir Patel said the House with its performance did not justify the same amount.
Winding up debate on the Finance Bill 2021-22 in the Senate; Finance Minister Shaukat Tarin said the government had profiles of around 15 million suspected tax evaders, who will be persuaded through a third party to either pay taxes or face the law.
The minister explained that they had found through electricity and phone bills and bank accounts that there were people, who were not paying as much tax they were supposed to be paying.
The minister said the government will have to retain deterrent provisions against the willful defaulters.
About the concerns, mainly from the opposition in the House regarding arrest of tax evaders, the minister contended that it had never been done in the country, but was a practice in other countries.
He substantiated his contention by referring to the arrest and conviction of Peter Graf, father of German tennis star Steffi Graf for evading tax on his daughter’s income as well as the arrests of the celebrated British horse racing jockey Lester Piggott and US based self-styled businesswoman Leona Helmsley over tax fraud and evasion.
The minister assured the senators that the action against tax defaulters would be taken only after a due process of high level scrutiny and acknowledged the fact that it had become a big issue.
“Therefore, we are going to make it satisfactory for everybody,” he added.
He also made it clear that not the FBR but third party like associations of traders, bankers and doctors would talk to these people paying huge utility bills and holding hefty amounts in their bank accounts. With reference to harassment by the FBR, the minister maintained that self-assessment had been restored.
He rejected the opposition members’ allegations that the budget had been prepared by the IMF and just read out by him.
Tarin said the IMF wanted imposition of Rs700 billion new taxes, including Rs150 billion increase in income tax, but said he had opposed.