ISLAMABAD: The Minister of State for Revenue Hammad Azhar has said PTI government has taken serious measures to remove the structural flaws in the economy, which were not addressed by previous governments.
Winding up the debate on Finance Bill 2019-20 at the National Assembly on Tuesday, he said the countries that were behind us after independence have made huge strides on path of development by building the structure of their economies.
The Minister of State said in the previous two years the stability of economy was put on stake due to political interests. He said the gas sector was facing 150 billion rupees loss while circular debt reached 453 billion rupees, ballooning to over 1100 billion rupees. He said cumulative losses of State Owned Enterprises reached 423.5 billion rupees.
Hammad Azhar said when the PTI government came to power there were only 6 billion dollar foreign exchange reserves. He said the previous government increased current account deficit and crippled the economy. It decreased the foreign exchange reserves to 9 billion dollars from 19 billion dollars in a year. He said they left a deficit of 2300 billion rupees in the last budget.
The Minister of State for Revenue said the PTI government made efforts to stabilize the economy when the country was at the verge of default. As a result of measures taken, the deficit in balance of trade started reducing and imports worth 4 billion dollars were brought down.
He said as part of stabilization measures, staff level agreement with IMF has been signed. We received support of 9 billion dollars from the friendly countries. In addition, Qatar has pledged to give us 3 billion dollars in support. Now, our position has improved.
The Minister of State said inflation rate is 9 percent now which is still less than the same period of previous two governments. He said this will be brought down over the years.
Hammad Azhar said the government will not borrow money from State Bank of Pakistan in future.
The Minister of State said there are misperceptions on certain issues in budget. He said no additional tax has been imposed on flour and ghee. However, tax has been increased on sugar from 11% to 17% which will translate into three rupees per kilogram increase at retail level. He said last year, the rate of sugarcane was 150 rupees per maund which is now 180 rupees per maund and overall 37 billion rupees more have been paid to sugarcane farmers. He said new laws were also introduced this year to check tax evasion by sugar mills. The Minister also clarified that there has been no tax on fruits and vegetables. The tax is imposed only on imported fruits, vegetables, and processed meat.
Hammad Azhar said our exports volume has increased in first ten months of this government. He said the work on housing project is ongoing and it will create millions of jobs. The Minister said Kamyab Jawan Program will give loans of 100 billion rupees to our youth to help them start their own businesses.
He said Ehsaas program is a social welfare program of the PTI government for which additional 90 billion rupees have been earmarked.
He said 217 billion rupees have been allocated for subsidy on electricity. This will benefit the 75% ordinary consumers.
The Minister of State said PSDP has been increased to 950 billion rupees this year and there is no cut on this programme.
Hammad Azhar said education is a provincial subject but federal government makes sizeable allocations in higher education. He said the actual expenditure in the education sector has been increased by 35 percent and 14 billion rupees have been especially allocated for knowledge economy.
The Minister of State said health budget has been increased from eight billion rupees to 13 billion rupees.
He said 152 billion rupees have been earmarked for FATA and one thousand billion rupees will be provided to erstwhile FATA in the next 10 years. He said 45 billion rupees have been allocated for nine projects in Karachi. He said the federal government will spend 280 billion rupees in cooperation with provinces on agriculture sector in five years.
He said zero rating on five export oriented industries has been abolished in order to streamline this sector. This will not impact the exporters who export their products abroad. He said tax refunds will be made and all obstacles in this regard will be removed. He said electricity flat rate for tube wells in Balochistan has been maintained to facilitate farmers in the province. He said the government has continued subsidy on gas and electricity for textile sector. He said customs duty on 1650 items has been slashed from three percent to zero.
He admitted that tax target of 5550 billion rupees is high, but the size of our economy demands it to be 8000 billion rupees.
He said property rates were revised in order to streamline this important sector of the economy by bringing these closer to market rates.
Giving the details of government decisions, he said the tax on tobacco has been slashed from 300 rupees to 10 rupees. He said the money generated from the taxes on tobacco will be spent in health sector.
He said the capital gain tax on mutual fund industry has been reduced from 25 to 15 percent.
He said there will be no need to present NIC number on purchase of less than 50,000 rupees. It has been decided not to conduct raids on houses for recovery of hidden assets including currency, jewelry and bonds.
The Minister of State said a mobile app is being developed to simplify taxation system through which a person can easily submit his tax returns without seeking any help from a lawyer.