Tarin reduces taxes on food, auto, IT, real estate, refinery

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No tax levied on wheat or its byproducts; Revenue target set at Rs5,800 billion


Ijaz Kakakhel
Islamabad

Minister for Finance Shaukat Tarin on Friday announced several relief measures in the annual budget 2021-22 and also warned heavy punishment for tax evaders adding that those who do not pay taxes will be brought into the tax net.

Winding general debate on the budget in National Assembly, Shaukat Tarin said that the government will seek a third party’s help for action against the tax defaulters. “Arrest will be made after due process.”

Incorporating some of the Senate recommendations in the budget, the finance minister announced several relief measures for different sectors.

He said the tax relief earlier given to the auto sector for vehicles up to 850cc is being extended to 1,000cc vehicles, while the tax imposed on medical bills, GP fund and dairy products is being withdrawn.

Tarin said there will be no tax on mobile internet and SMS, while 75 paisa will be charged from users on a call of more than five minutes.

The minister said there will be zero tax on registered IT platforms, while 2% tax will be charged from unregistered ones. There will be 17% tax on value added products of gold and tax on poultry is being reduced from 15% to 10%.

On textile products, the tax has been reduced from 12 to 10 percent. Similarly, the tax rate on real estate has been reduced.

Under the construction package, the ratio of income tax has been reduced from 35 percent to 20 percent.

He said tax relief has also been given to oil refineries so that they could turn to Euro-5 fuel.

The finance minister categorically stated that no tax has been imposed on flour and its products.

He claimed the budget has given hope to all tiers of society and said it envisages a comprehensive plan for the uplift of four to six million poor households.

Under this uplift plan, rural households will be given interest free loans of up to Rs300,000 for agriculture productivity, besides Rs200,000 for the purchase of equipment.

He said Rs500,000 of interest free loans will be provided to each deserving household in the urban areas to start their businesses. He said these poor households will also be provided with health cards.

The minister said that the allocation for the Ehsaas programme has been enhanced to Rs260 billion to provide assistance to under-privileged segments of societies.

He said the government will provide targeted subsidies to the low-income groups on power tariff, flour, ghee and sugar.

Tax collection for the next fiscal year has been fixed at Rs5800 billion. He said $1.1 billion has been earmarked for the purchase of Covid-19 vaccines, while Rs5 billion have been set aside for the development of the e-voting system.

The minister reiterated that Pakistan has become a net food importer and the present government will now spend on the agriculture sector to achieve self-reliance. He said that a plan has been formulated in cooperation with the provinces to uplift this sector.

He said that cold storages and warehouses will be established and a network of agri-malls will be spread across the country to eliminate the role of the middle man.

Incentives of Rs40 billion will be given to the industrial sector with an aim to increase competitiveness, the minister said, adding that tax relief has been given to the SMEs sector and loans of Rs100 billion will be given to them on a markup of 9 percent.

“Despite the Covid-19 challenge, we achieved a growth of 4% during the current fiscal year due to interventions made in different sectors, including industries, housing and construction and agriculture,” Tarin said.

Shaukat Tarin said the government would focus on growth strategy to create new job opportunities and enhance the income levels of the people.

He said the budget envisages a comprehensive plan for the uplift of four to six million poor households. Under this plan, these households will be provided with affordable houses.

The finance minister said that the government has increased the annual PSDP by 40 percent from Rs630 billion to Rs900 billion.

He said projects pertaining to transport and energy as well as development of backward areas including Balochistan, Tribal Areas, and Gilgit-Baltistan have been given priority in the development plan to bring prosperity and reduce poverty.

 

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