Announces Rs250m prize scheme for sale receipt holders;
No increase in tax rate of mobile phone calls, SMS, internet
Sharafat Kazmi/Mohammad Arshad Islamabad
Finance Minister Shaukat Tarin, ruling out the chances of bringing any mini-budget, on Saturday said the budget 2021-22 focuses on uplift of the poor and sustainable economic growth through incentives for various sectors including agriculture, industry and housing.
Shaukat Tarin, addressing a post-budget press conference on Saturday along with Minister for Economic Affairs Khusro Bakhtiyar and Adviser to the PM on Commerce and Trade Abdul Razak Dawood, and Special Assistant on Poverty Alleviation and Social Safety to the Prime Minister of Pakistan Sonia Nishtar, said the main emphasis of the budget is to protect the vulnerable segments of the society.
The Minister stressed the need for jacking up revenue collection by taking the country’s exports-to-GDP ratio up to 20 per cent from the current 8pc and added, “We have to enhance the tax-to-GDP percentage to twenty per cent over a period of seven to eight years.”
The government is compiling data, including that related to mobile phone and electricity bills of people, in a bid to broaden the tax next, he maintained.
Our focus is to bring more people into the tax net instead of imposing more taxes on the people already paying taxes, he added.
Tarin announced that the government will bring in a prize scheme to encourage people to demand proper receipts for purchases they make from retailers, added that the move would help in documentation of the economy.
The Minister said some 10,000 points of sale (PoS) were currently under use but their number would be increased to 60,000.
The government expects to collect Rs100b to Rs150b additional revenue through the PoS system, he added.
The minister explained the tax collection target of Rs5.8 trillion has been set for the next fiscal year, which he hoped, will be achieved through innovative approach, including the use of latest technology.
Tarin said duties on almost all raw materials have been abolished to strengthen the local industries and cut down on imports, adding the rates of cars below 850cc engine size will come down after tax concessions given to these automobiles.
He said four million poor households, to be accessed through the Ehsaas Survey, will be provided with interest free business and farming loans. He said these households will also be given loans to build their own houses.
Besides, they will be given health cards and one member of each family will be imparted technical training.
He said the incentives in the industries are not only textile specific but have been extended to different sectors.
He said taxes have been abolished to facilitate the investment of Chinese friends in the Special Economic Zones being set up under China Pakistan Economic Corridor project.
The Minister said the taxes on the IT have been rationalized in order to exploit its full potential. He said we want to substantially enhance this sector’s exports in the years to come.
Shaukat Tarin said the government has increased subsidies especially in the power sector. He said we will bring efficiency in the power sector.
DISCOs will be operated through independent boards and they will be privatized. He said line losses will be reduced and recoveries will be enhanced.
Responding to a question, the Finance Minister said the federal cabinet did not approve the proposal to enhance charges of SMS, mobile phone calls and interest.
Answering another question, he hoped that inflation will remain below eight percent in the coming years.
To a question Minister said we are in talks with the IMF. We have the same goal. The IMF wants us to move towards stable growth.
To an other question Shaukat Tarin said the government has presented a total growth budget and their challenge is to stabilise growth.
Answering a question, he said big retailers have sales of Rs1,500 billion and sales tax has to be levied on all big stores, and added the government will introduce a scheme under which prizes amounting to Rs250 million will be distributed among receipt holders every month. The amount of prize money will be increased gradually, he continued.
The move is aimed at documenting the economy, he added. He announced plans to provide employment and give Rs150,000 loan to small farmers.
Loans up to Rs2 million will be given to build a roof and loans to poor farmers will go up to Rs500,000, he added.
Shaukat Tarin said that government was willing to increase the ratio of direct taxes instead of indirect taxes; therefore, the tax authority would install sales tax collecting mechanism at big stores and would offer prizes to shoppers for collecting genuine shopping receipts from the big stores and malls.
He announced to offer more facilities and incentives to taxpayers, saying that the tax authorities were collecting data of potential taxpayer and non filers and would reach non filers through the utility bills; electricity, gas and others.
Shaukat said Pakistan has become a food deficient country and we are now importing what we used to export like pulses, wheat and sugar.
“We did not pay attention to our crops, but now we will pay attention to agriculture sector,” he assured.
Tarin added that taxes have been abolished to facilitate the investment in the Special Economic Zones being set up under China-Pakistan Economic Corridor project.
Regarding the IT sector, he said taxes have been rationalised in order to exploit the full potential of the sector and added that the government wants to substantially enhance the sector’s exports in the coming year.
Talking with regards to the power sector, the finance minister said that subsidies have been increased and efficiency will be brought to the sector.
About PSDP, the finance minister said it has been enhanced ‘significantly’ to take the country towards sustainable growth.