‘Charter of Economy’ must before elections

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Dar says no new tax levied in budget; Grip around tax defaulters to be tightened; Govt saved, consolidated macroeconomic goals; No justification for budget-related price hike

Muhammad Arshad

Islamabad

Finance Minister Ishaq Dar on Saturday stressed the need to create a “charter of economy” with consensus by all political segments, before the general elections next year stating that the government’s prime objective is to improve the economic condition of Pakistan.
Addressing the post-budget press conference here, Dar said that the 2017-18 budget was focused on increasing spending on development programmes whereas inflation would also be curtailed.
Dar noted that the new budget had set a tax revenue collection target which was 14 per cent higher than the preceding budget while the gross domestic product target had been set at 6pc.
The federal minister pointed out that defence was given priority over other sectors, which is why it was allocated Rs920b, a seven per cent increase over last year’s budget.
He also stated that the government had not imposed any new taxes on common citizens. “The perception that we have imposed taxes worth Rs500b is wrong. We have imposed taxes worth Rs120b and offered relief of Rs33b.”
Citing the example of milk prices, he said that any such price hike was unjustified. He said, “I read on social media sites that the price of milk has gone up even though we did not impose any new tax on it. The price of milk should not go up because we have not done anything to affect its price.”
He stated that the budget increased the salaries of government employees by 10pc, which was something he was satisfied with.
The Finance Minister said income tax defaulters will be dealt with strictly. The government will continue to tighten grip around non-filers of tax returns to bring them into the tax net.
Dar also announced that the Rs180-million export relief will continue in the next fiscal year as well. He further forecast that the current government would present the sixth federal budget next year which would be unprecedented in the history of Pakistan and no constitutional amendments are needed in this regard.
The Minister said that main focus of the new budget was on economic growth, job creation, poverty alleviation and improving living standard of the common man. The government will have to work hard with unity to strength the economy of the country.
He said that work hard would be needed to sustain the 3.4% growth in agriculture sector and Rs1001 billion had been allocated for agriculture credit. Two million small farmers with less than 12.5 acres land will be given loans up to fifty thousand rupees at 9.9 pc interest rate.
He further added that relief had also been given to farmers and poultry farmers by decreasing sales tax which would also have a positive impact on agriculture. The government will bear Rs13.8 billion loss for decrease of sale tax on DAP fertilizer.
He said the main targets are GDP at 6% and inflation 6% and the current expenditure would be kept below the inflation to reduce the budget deficit. The actual tax in this budget was 87 billion rupees because the total tax is 120 billion and 33 billion was relief.
Similarly, he said that safety net had been increased with Rs 121 billion rupees. Tax incentives have been given for agriculture and information technology. IT ministry will train one million freelancers to create new jobs for youth.
Criticizing the practices of the past governments, the minister said in order to increase employment over-staffing was conducted in government departments. He claimed that the federal government, with the latest budget proposal, had achieved the goals it had set in its party manifesto.
Ishaq Dar said that the macroeconomic gains would not only be saved and consolidated but would be built further to ensure Pakistan’s entry into the Group 20 countries by 2020.
He said, “What are our targets, and where do we want to lead the country, should be clear and this is the best time to have a Charter of Economy and Roadmap.”
“The finance minister said that instead of a routine three-year medium term plan, the government in the budget document, had introduced a five-year vision 2018-23. The Vision, he said, aimed at focusing on the second generation reforms including deepening of financial market, improving ease of doing business, enforcing property rights, improving regulatory apparatus, enforcing rule of law, creating a credible and efficient judicial system and to build an institutional foundation that can sustain economic growth and give protection against external shocks.
The vision envisages growth above 7 percent and highlights that over the next five years, the key drivers of economic growth should be investments, environment of competition and innovation with the private sector as an engine of growth, he added.
He said the government institutions should be reformed to focus on improved service delivery and better regulations to support the growth momentum while governance, transparency, accountability and business-friendly environment should become the key focus of country’s policies.
The finance minister said that one million youth would be provided training of information technology.
He said the existing subsidy on tube-wells would also continue in the next fiscal for year farmers.

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