ISLAMABAD – Finance Minister Dr Abdul Hafeez Shaikh has said that the budget for the next financial year will accelerate economic growth, check inflation, maintain economic stability and bring wealthy in the tax net.
The minister maintained budget 2012-2013 seeks to maintain economic stability and growth acceleration through reducing inflation to single digit figures, which, he said, is already on the decreasing trend from last three year. Moreover, the government has focused on broadening the tax base by brining well-to-do tax evaders into the tax net, he added.
He said that government has given special attention to the power sector in the budget, as it has allocated a hefty amount of Rs183 billion for the said sector for upcoming financial year and it would provide further funds if needed. He informed that federal government has given Rs250 billion subsidy to power sector during the outgoing fiscal year. “There is need to improve the governance system in power sector, as providing only money is not the solution to this problem “, he said. Apart from Rs183 billion, Wapda and power companies will also spend additional Rs115 billion on power projects to ensure electricity to people on cheaper rates.
The minister informed that government has adopted simplicity and austerity in the budget and in this regard the prime minister has planned to live in a smaller house instead of the PM House, which would be used to house an international educational institute. He dispelled the impression that they have announced an election year budget.
Dr Hafeez Shaikh insisted that government did not impose any new tax on the existing taxpayers instead it provided taxation relief to the masses. Income tax exemption limit has been raised. From now on annual income of Rs400,000 or above would be taxable as against earlier ceiling of Rs 350,000 per year. Similarly, turnover tax rate is being proposed to cut to a half from existing one per cent on the demand of business community. Custom duties on stationery items has been abolished and reduced on pharmaceutical raw material.
The government has increased the pays and pensions by 20 per cent against the inflation rate of 11 per cent. Keeping in view the unemployment in the country, the minister said that government has decided to create 100,000 jobs. Allocations are made to provide 60,000 internships to the graduates and 40,000 to the masters degree holders in next financial year, he added. He said government would introduce subsidised solar tubewells in the country to boost the agricultural production and help resolve energy issue.
Shaikh said that government was working to simplify the taxation system by keeping only two taxes viz income tax and sales tax. The government has already abolished Special Excise Duty (SED) and Regulatory Duty (RD) on 392 items in last budget 2011-2012. Similarly, the government has abolished Federal Excise Duty on 12 items in the current budget 2012-2013 and 15 items in last budget 2011-2012. Uniform sales tax at 16 percent has been proposed for some raw materials.
To a question, Dr Shaikh said that government was working to get rid of banking borrowing through improving tax collection, and Federal Board of Revenue (FBR) collection has shown 25 per cent growth in the outgoing fiscal year. The government would utilise the increase in Gas Infrastructure Development Cess for the construction of Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipelines to overcome the energy shortages, he added.
To a question about Coalition Support Fund (CSF), the minister said it has been included in the budget for next fiscal year. He informed that government did not take a single penny from International Monetary Fund (IMF) from May 2010, which indicates that Pakistan’s economy could survive without IMF loans. The government has repaid $1.2 billion to the IMF during the outgoing fiscal year from home resources, he added.
He said Benazir Income Support Programme (BISP) was helping in reducing poverty and was therefore allocated Rs50 billion in the current year to provide benefit to additional families than the existing 3.5 million families who were getting cash transfers of Rs1,000 per month. Low-income groups would be provided targeted subsidy by selling discounted essential food items through Utility Stores. He said government spent Rs50 billion to import 1.2 million tons fertiliser which was provided to farmers on reduced rate that led to self-sufficiency in food and created surplus for export.
Speaking on the occasion, Federal Minister for Information and Broadcasting Qamar Zaman Kaira has said that power crisis was emerged due to gap of almost ten years, as electricity production in previous government was zero. He emphasized on the provincial governments to take steps as decided in energy conference last month.