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January 13, 2019

Government to present mini-budget on Jan 23: Umar


January 13, 2019

KARACHI: The government will announce mini-budget on January 23, instead of January 21,2019, Finance Minister Asad Umar said on Saturday.

Talking to businessmen and industrialists at the Karachi Chamber of Commerce and Industry (KCCI), the minister said, earlier, the mini-budget was to be announced on January 21, but due to Prime Minister Imran Khan’s foreign visit, now it will be presented on January 23.

Umar said, "Tax anomalies will be removed in the mini-budget and any changes in the tax policy will be made after approval from the Parliament."

“The statutory regulatory order (SRO) regime has ended and any modification in the taxation regime can only be done through the act of Parliament.”

“Savings and investment are at their lowest in the country, and this is why we will take measures to lower consumption and increase investment.”

The finance minister said the government had further reduced planned development expenses in the mini-budget and increased taxes for high earners.

Meanwhile, the finance minister said the government would also present the supplementary finance bill on the same day, which is aimed at investment facilitation and improvement in ease of doing business rather than revenue generation.

“Easing doing business is the priority of the government and measures, in this regard, are being proposed through the finance bill. Things that can be introduced without the bill would start coming up by the end of the month,” he added.

In the last three decades, Pakistan’s economy had become consumption driven, which discouraged the culture of savings and investment.

Resultantly, the country had to import capital, causing higher trade deficit, he said, adding: “Consumption shall not be incentivised, but investment shall be encouraged.”

Talking about regional trade, he said economic diplomacy was at the heart of the government’s foreign policy, adding that Pakistan wanted normal relationship with India as a neighbour. “Army fully supports the government’s stance on having cordial relationship with India, particularly trade and investment,” he added.

The minister expressed the hope that after general elections, India would come in the negotiations table and progress could be made on all the issues, including Kashmir.

About the industry’s refund claims, the finance minister said the government was over-burdened with debts, as around Rs3 trillion were outstanding, including the circular debt and refund claims.

“We have framed a formula, according to which one-thirds of the refund claims, would be issued in cash during this year, while the government would issue negotiable instruments for the rest.”

“These instruments could be discounted from banks; even these could be traded on the stock market,” he added.

Umar also said that with a view to facilitate industry, the involvement of ministries in approving and processing the refund claims was being eliminated, and only the central bank would deal with this issue.

The friendly countries had extended much support to the government in these times of crisis, he said, adding: “We have been talking about trade and investment also with the friendly countries. Saudi energy minister is in Pakistan, and he has expressed interest in making investments.”

About IMF’s bailout package, the finance minister briefly responded that the government was still in negotiations with the donor agency.

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