ISLAMABAD: Finance Minister Dr Abdul Hafiz Sheikh had said there should be check and balance system in place on defence budget and its expenditure. Finance Minister said this while addressing post budget briefing 2011-12 here Saturday along with deputy chairman planning commission Nadim ul Haq, Chairman FBR Suleman Siddique, secretary finance and other officers.
He held that opposition leader statement that budget had been evolved on the dictation of IMF runs contrary to the facts.
Those who would set up their industry with their own capital would be granted tax exemption for five years, he told.
Several factors contribute to economic management, he said adding budget envisages detail of government expenses and income. Through monetary policy interest rate is watched. This leaves impact on imports and exports. Interest rate is controlled if there is price hike.
Government allowed subsidy on oil by 50 percent last year, he said adding budget was not a thing which could address 62 years old problems of the country. Decision on distribution of resources among provinces was taken under NFC award, he told. Govt kept frozen civilian expenditure for two years. Ban was imposed on new recruitment purchase of furniture and vehicles. “We are heading towards targeted subsidy. Needy persons will be allowed subsidy. Subsidy to the tune of Rs 35 billion was given to 3 million families”, he added.
Subsidy amounting to Rs 250 billion was provided in energy sector, he underlined. Rs 421 billion were paid in circular debt. Asian Development Bank and World Bank had asked us to provide subsidy to those sectors which are dependents on energy, he said. The existing amount of subsidy would be enhanced in respect of certain sectors in cabinet meeting, Rs 50 billion would be provided to BISP this year, he informed.
He told government was increasing expenses in social sector. Maximum resources would be spent on health and education sector provided to provinces under NFC award, he remarked. No income tax was increased in the last year to improve tax system, he hinted.
Government decided to do away with special excise duty fully which was levied on million of goods, he told. Duty has been kept intact on explosive material, bath room wares and large vehicles. Decision has been taken to undo federal excise duty and it would be phased out in three years.
Taxable income has been increased from Rs 300000 to 350000 while duty on cement has been reduced from Rs 700 per tone to Rs 500 per tone. Tax imposed on withdrawal of money from banks has been reduced from .3 percent to .2 percent. Now duty will have to be paid Rs 200 instead of Rs 300 while drawing Rs 100000 from the banks.
Fertilizers, textile leather, surgical apparatus, sports goods and carpet industry had been brought into tax net, he told. Only 1.5 million people file tax returns out of population of 180 million, he said. “We want to give the message that tax will be levied on those person who are making merriment since the last 62 years”, he held.
FBR issued 13000 cheques last year and 46000 this year on account of refund, he indicated. A sum of Rs 16 billion and 40 billion were returned respectively, he added.
Replying to a question he said IMF does not shower favors on Pakistan. It provides loan not only to Pakistan but also to 150 other world countries. Tax should be levied at uniform rate no matter whatever is source of income, he maintained. Slapping tax on agriculture is provincial subject and provinces are collecting tax on agriculture income. A dip is being witnessed persistently in income of provincial agriculture tax since the last 10 years, he said. -Online