THE actual shape of the budgetary proposals for the next financial year and their impact on the life of the people is now clearer after Finance Minister Shaukat Tarin wound up general discussion on the new budget in the National Assembly on Friday, announcing more relief measures for different segments of the society.
With some exceptions, the speech of the Minister conveyed an impression that the Government was responsive to the reaction and demands of the people as well as suggestions that emanated during discussion in the Lower House and the Upper House.
In a welcome development, the Government withdrew the proposal to tax Internet data and SMS that sparked instant reaction on social media as the budget was presented in the National Assembly.
As for the tax imposed on phone calls, the Finance Minister revised the original proposal of charging one rupee on each call exceeding the duration of three minutes but it will still hurt almost all customers especially those fond of long conversation as they will now have to pay a tax of 75 paisa on calls going beyond five minutes.
It is not clear whether it would be a one-time tax on crossing the threshold of the first five minutes or the users would be penalized for long talks after every five minutes.
The plan may yield some revenue for the government but is definitely anti-telecom as it goes against the interest of the cellular companies and their customers.
Removal of tax on milk as well as medical bills and provident fund of the government employees and reduction of its rate on gold, silver, poultry products, cattle feed and textile products could help overcome the menace of price-hike to some extent provided the authorities concerned see to it that the relief is duly passed on to the people.
Similarly, the decision to impose taxes on reduced rates, which was originally meant for cars up to 800cc, on cars up to 1,000cc would also help bring down rising prices of cars.
It is, however, regrettable that the Government did not listen to the plight of its employees and pensioners, who were utterly disappointed over the announcement of a mere 10% increase in their pay and pension.
They were expecting upward revision by the Finance Minister during his wind up speech after generous raise in salaries by the Sindh Government and comparatively higher increase by the KP Government but the authorities ignored their plight.
It is hoped that the Pay and Pension Commission would expedite finalization of its recommendations and based on them the Government would review pay scales and pension to compensate the fixed income groups for rising inflation.
The decision to withdraw initially imposed taxes on IT and e-commerce platforms are in line with the need to ensure provision of congenial atmosphere for promotion of IT and e-commerce, which have the potential to create more employment opportunities for educated youth, ensure ease of doing business and earn foreign exchange for the country through enhanced exports.
Again, the income tax, which was increased to 35 per cent under the construction package, had been reduced to 20 per cent, which would be highly appreciated by all stakeholders in the construction sector.
It also augurs well that the Government has not succumbed to the pressure of the IMF as far as upward revision of the power rates is concerned as these are already higher than most of the countries of the region inhibiting economic growth.
There are, of course, structural issues in the power sector as the Government had to pay Rs.900 billion on account of capacity payments for electricity that was not even being utilized and the circular debt is mounting with the passage of time but the Minister vowed to address the challenge through reduction in losses and increasing the recoveries of bills.
Tax relief has also been provided to oil refineries so that they could turn to Euro-5 fuel but here again strict monitoring of implementation is required as incentives provided from time to time by successive governments to encourage deletion programme could not yield desired result because of lack of vigorous vigilance by ministries and departments concerned.
The Minister has vowed that Rs 5,800 billion tax collection target would be met through automation and bringing changes in the tax system and one hopes he would live up to his commitment and there would be no mini budget during next year.
