ISLAMABAD: Minister for Finance and Economic Affairs Miftah Ismail Sunday said the budget for fiscal year 2018-19 will expand the economy by more than six percent, facilitate taxpayers, encourage growth of businesses besides financially helping vulnerable sections of society and building infrastructure in backward areas like FATA.
Speaking at a National Budget Seminar organized by Institute of Cost and Management Accountants of Pakistan here, he said, “With this budget I want to make life easier for people and promote businesses by increasing speed of economic growth.”
He said this year, GDP growth rate was at 5.8 percent while before that it was 5.4 percent and the target for 2018-19 was set at 6.25 percent.
Pakistan needed to consistently grow faster as was done by Japan, Korea and China which maintained higher growth rates for decades.
“Our growth is slower than growth of Bangladesh and Sri Lanka. We intend to take our growth beyond 7 percent.”
The 5.8 percent growth figure was estimated by Pakistan Bureau of Statistics and verified by World Bank, International Monetary Fund and Asian Development Bank, he noted.
Miftah said according to the proposed budget, the taxes were lowered but it was made mandatory for people to become tax filers if they wanted to buy expensive property and cars. This step was taken to make them part of the white documented economy.
“Anybody wanting to buy property worth Rs four million or new and imported vehicles has to become active taxpayer. These measures will change nature of the Pakistani economy.”
He assured that the procedure for filing tax returns would be made more simple. He said tax rates for the present taxpayers particularly salaried class were reduced. People were encouraged to accurately report buying price of property by bringing down tax rates.
He informed that Pakistan had received $ one billion long term loan from the commercial bank of a friendly country.
He said it was estimated that Rs 3935 billion taxes would be collected in current year which would be higher than 18 percent last year while the target for next year was Rs 4435 billion, 11 percent more than in this year.
“When economy expands, revenues also increase. The economy is set to growth 6.25 percent against the inflation below six percent.”
Explaining the measures to generate revenues despite reduction in tax rates, he said Federal Board of Revenue (FBR) collected 52 percent of its taxes from imports arriving at ports.
He said the IMEI numbers of all legally imported handsets would be matched with those that would be active on the networks of telecom operators. The step will stop theft of phones and smuggling and increase revenue. Sales tax on import and purchase of different items had been cut to 5 percent.
The minister told that no questions will be asked from 99.8 percent of persons receiving remittances from abroad but those who will get remittance above Rs 100 million will have to explain the sources of the funds.
He explained that the Prime Minister Shahid Khaqan Abbasi asked him to become federal minister months ago.
He said there was no option but to devalue the dollar as it was kept artificially low for three years during which the exports were decreasing against rise in imports.
Pakistan’s exports were $ 24 billion and $12 billion of it was consumed in oil imports. “We need to encourage investment and capital formation and increase our exports faster than imports to control the current account deficit.”
Miftah said, “The government will introduce measures to ensure that 100 percent children are enrolled in schools. Rs 10 billion have been allocated for a programme to end stunting which affected 40 percent of children.”
Moreover, Rs 100 billion were proposed for building of schools, hospitals, roads and other facilities in the Federally Administered Tribal Areas (FATA), he added.
The minister said Pakistan was the 25th biggest economy on the basis of purchasing power parity and in the last five years, in line with vision of former prime minister Muhammad Nawaz Sharif, the PMLN government added 12000 megawatts of electricity to the national grid, built an extensive network of roads and made the gas available for industrial, commercial and domestic consumers.—APP