Finance Minister Dr Abdul Hafeez Sheikh has said that despite difficult circumstances the new budget contains maximum relief for the common man. Addressing post budget news conference here on Saturday, he said the taxation system has been simplified to facilitate people.
He pointed out that the government has reduced GST from 17percent to 16percent which would have a negative impact of 36 billion rupees on revenues but benefit people. The Special Excise Duty, which was levied on 100 items, has altogether been abolished. This would have soothing impact on overall price situation, he said.
The Minister also said that the Regulatory Duty on 392 items out of 397 has also been abolished completely. It is now imposed only on five items of cigarettes, ammunition, betel-nut, big vehicles and imported tiles and sanitary-ware for bathrooms.
He said that the government intends to completely abolish the Federal Excise Duty in three years, and as a first step it has been withdrawn on 15 items. It has also been reduced from 12 to 6% on soft-drinks and from 700 rupee per metric tons to 500 metric tons on cement, he said. Withholding tax on cash withdrawal has been reduced from 0.03 to 0.02% and this shows that the Government was fully alive to the complaints and concerns of the people on imposition of this tax, he said.
Hafeez added that exemption limit for income tax has been raised from the existing Rs 300,000 to 350,000. He said the new budget envisages tax exemption for five years for those who would set up industry from their own sources.
The Minister said the government was moving towards a regime where only Income and Sales Tax would be in place. He said Sales Tax was being imposed on those sectors in the new budget which were previously out of its net.
Dr Hafeez Sheikh said the budget sent a clear message that instead of add more burden on the existing tax payers, it was time for those who have been out of the net for the last 62 years to pay their taxes.
The Minister dispelled the impression that withdrawal or reduction in subsidies would add to the difficulties of the people and said targeted subsidies were being increased to benefit the deserving people. For this purpose, allocations for Benazir Income Support Programmes, which were 35 billion rupees this year, have been increased to 50 billion rupees. Subsidies through Baitul Maal and Micro-Finance schemes would also be increased for the benefit of the people, he said.
Asked about agricultural income tax, the Minister said a national consensus was emerging that all incomes whether from industry, services or agriculture should be taxed. He said there were issues concerning collection and rates of the tax and, agriculture being domain of the provinces under the Constitution, federating units would sort out these things.
He said agricultural income tax was already in vogue in the provinces but its performance is not satisfactory.
To a question he said the country’s debt constitutes 55.5 of the GDP. He said that the country has to secure loans from external resources or State Bank of Pakistan due to gap in expenditure and income and the only solution of the problem is broadening of the tax base.
New budget contains maximum relief for common man: Hafeez
