ISLAMABAD: Federal Minister for Finance Miftah Ismail Saturday said the federal budget for the year 2018-19 was balanced and focused on maintaining growth momentum gained during last five years, dispelling the impression that the government eyed on the upcoming election in the fiscal plan.
Addressing the Post Budget Press Conference along with Advisor to the Prime Minister on Revenues Haroon Akhtar Khan, Federal Secretary Finance Arif Khan and Chairman Board of Revenue (FBR) Tariq Pasha, the minister said the budget was growth and relief-oriented. He said that it was the 6th budget of the incumbent government and efforts were made to provide maximum relief to the people.
The government, he said, had proposed several measures for the uplift of industrial sector. Special incentives were provided to the manufacturing sector for enhancing exports, with imposition of duties to discourage import of luxury goods, he added.
He said all major micro-economic indicators were showing resilience as exports witnessed about 24 percent growth during the last month and inflation reduced to a single digit. The government was determined to curtail the budget deficit, he added.
Miftah Ismail said the government had secured $1 billion financing, which would help raise the level of foreign exchange reserves.
The government, he said, had no intention for getting any bailout package from International Monetary Fund (IMF) as an effective strategy had been put in place that would help improve the national economy.
“We have no intention to go for the bailout package. Efforts are being made to avoid the same,” he remarked. He expressed the confidence that foreign exchange reserves would further improve in the coming days due to prudent policies introduced by the government.
Advisor Haroon Akhtar while speaking at the press conference, said the government had more than doubled the revenue collection, witnessing 20% annual growth rate and contained inflation at 4.5% during its five-year tenure.
He said the provincial share from the divisible pool had increased from Rs 1300 billion to Rs 2300 billion.
Haroon said the Federal Board of Revenue (FBR) had taken visionary measures to facilitate taxpayers. The selection for audit in respect of all three taxes – Income Tax, Sales Tax and Federal Excise Duty – had been made risk-based and a case would not be audited more than once in three years for each tax, he added. The salaried class, he said, had been exempted from audit.
He said previously grant of stay by the Commissioner (Appeals) was subject to payment of 25% of tax liability, which had now been reduced to 10%.
The advisor said the decision of Alternate Dispute Resolution Committee had been made binding while the powers of commissioners were transferred to the FBR.
Talking about promotion of exports, Haroon said the government took several measures for promotion of export of textile and other products. The measures included reduction in mark-up rates of LTFF and ERF to historic lows of 5 percent and 3 percent respectively, duty free import of textile machinery, uninterrupted supply of gas and electricity to the industry, zero-rating of five key export sectors, and introduction of Rs180 billion export package.
He said that the government had also proposed steps in the current budget to protect local industry for reducing dependence on imports. Tax relief was given to dairy and agricultural sector, he said, adding that relaxation in taxes were announced to promote film industry.
He rejected the misconception that the current budget was not a revenue generating one, saying the government had introduced many initiatives for revenue generation. The advisor said the super tax had been proposed to be continued for the financial year 2018-19, however, its rate might be reduced by 1% for both banking and non-banking companies.
The super tax, he said, was imposed in 2015 for the rehabilitation of internally displaced persons, which continued in 2016 and 2017. Currently it was being charged at 4% on banking companies and 3% on non-banking companies, generating over Rs 500 million income, he added.
He said the government would impose tax on remittances of more than Rs10 million in case their sources of earning were not justified. He said the FBR had an agreement with NADRA (National Database Registration Authority) for information sharing which would help expand the tax-base.
Haroon said Miftah Ismail had given a good vision to take forward economy and also appreciated the team of FBR and other relevant departments for their untiring efforts in preparing the budget document.
Replying to a question about the construction of sports stadiums, Miftah Ismail said that it was the project of Planning Commission which had decided in consultation with the ministries concerned the locations for setting up sports facilities in the country. “So, Finance Ministry neither takes any decision nor gives any dictation in this regard.”
To a question regarding petroleum levy, the minister said the PML-N government had presented a realistic budget. Petroleum prices in Pakistan were at the lowest level among oil importing countries, he added.
Adviser Haroon Akhtar, to a query, said to improve the current account deficit, the government had given an export package in its earlier budget plan that greatly helped in ‘triggering’ the exports. “If exports’ growth continued at the same pace we will have no need to go to anyone for financial assistance. There is no need to get panicked.”
Answering a question about increased circular debt, Miftah Ismail said the government had added over 12,000 MW to the national grid during the last five years, which was a record in the country’s history and the increased power generation caused surge in the circular debt.
The minister said the government was making efforts to clear the circular debt judiciously. Rs100 billion would be released to the Independent Power Producers (IPPs) soon and the remaining amount would also be cleared at the earliest.
Responding to a question, Haroon Akhtar said due to the measures taken by FBR, the illegal trade of cigarettes in the country had declined to 35 per cent from 40 per cent. The government had introduced third taxation tier for the tobacco industry, which had helped increase tax revenues from the industry.
“The measure has proved to be very positive as it has started showing results now,” he added.
Appreciating the role of FBR in this regard, Miftah Ismail said the Board was doing a fine job in order to curb the illegal trade of tobacco. NNI