1. Pakistan is a signatory of SDGs and is striving to achieve targets of SDGs. People are directly provided with civic facilities under this programme. To make the lives of people, easy and to serve the underprivileged people, a hefty amount of Rs 70 billion has been allocated. In addition, Rs 40 billion has been allocated for various other schemes in social sector.
Education and Programme for Youth
- Our government has given priority to the completion of ongoing projects. An allocation of Rs 51 billion in the budget for higher education project has been proposed.
Health
- An amount of Rs 24 billion has been allocated to provide better health services to people, control and eradicate viral diseases, provision of medical equipments, vaccination and enhancement in the capacity of health establishment.
Climate Changes
- We are not oblivious of importance of climate changes in a difficult time like this. An amount of Rs 10 billion has been allocated to meet this challenge which includes plantation and other projects for improving natural environment.
Science, Technology and IT Mr. Speaker!
- Government has allocated Rs 17 billion for imparting training in IT sector, providing youth with laptops, improving network and promoting IT export.
Agriculture and Food Security
- An amount of Rs 11 billion has been allocated to modernize the agriculture sector and increase the use of machines, lazar leveling of land, modernizing the irrigation, provision of quality seeds and exports of agriculture products.
Industry and Agriculture Produce
- Steps to provide essential infrastructure and services for special economic zones are included in next year’s schemes so that market share in domestic and international market can be enhanced. An amount of Rs 5 billion has been allocated for value added export based on latest technology, mineral sector and industry.
PART-II (FBR Part I)
Mr. Speaker,
- The guiding principles for this year’s taxation policy are:
1 More emphasis on Direct Taxes namely Income Tax & Capital value Tax.
2 Taxing the unproductive assets
3 Taxing those who made exhorbitant profits (windfall gain)
4 Protect the productive assets and
5 Bring equity through the distribution of wealth by taxing the wealthy.
- As is known by everybody that Pakistan’s investment climate and taxation structure do not encourage entrepreneurship. Rather it discourages new businesses and encourages investment in real estate. This is a multi-faceted menace. It is anti-growth.
- It causes an artificial increase in the prices of real estate taking housing facilities out of the reach of the middle classes. The money generated from this dead investment is a major source of inflation and social disharmony. We don’t want to discourage the real estate sector but we want to steer this sector in a direction where it can become the engine of growth for cities. Our proposals aim at encouraging construction, and vertical growth, and discouraging speculative investment in open plots.
- This Government intends to create a business-friendly environment. It has been unfortunate that the major thrust of recovery of income tax has been through withholding taxes. Adding fuel to fire, the presumptive tax regime that is largely run through withholding taxes has transformed its character from direct to indirect tax. Thus withholding tax regime has become inflationary in its nature. Moreover, it not only creates distortion in the taxation structure but also reduces the ease of doing business. This government aims at correcting this. We aim at reducing withholding taxes, converting final taxes to minimize taxes, and minimum taxes to adjustable taxes.
Mr. Speaker,
- I now present proposals regarding income tax relief measures:
(i) The tax rate on salaried individuals
The basic threshold of taxable salary is proposed to be enhanced to 12 lac from the current 6 lac rupees for salaried individuals. This would pass tens of billions of rupees benefit to salaried people. This will generate a positive economic cycle whereby this money would get transferred to the businesses as the disposable income of salaried people increases therefore ultimately, the government will benefit through the thriving of the business, the creation of more jobs, and tax revenues in the future.
(ii) The tax rate for Business individuals and AOPs
In the face of inflation, the basic threshold of exemption for business individuals and AOPs is proposed to be enhanced from 4 lac to 6 lac.
(iii) Reduction in the tax rate on Bahbood Certificates
Currently profit from investment in Behbood savings certificates, pensioners benefit accounts, and Shuhada family welfare accounts is taxed at a maximum rate of 10%. In order to provide further relief to pensioners, it shall be taxed at a maximum rate of 5%.
(iv) Fixed Tax Regime for retailers
A fixed tax regime for small retailers is being proposed wherein tax will be collected along with electricity bills along with simplified registration and reporting regime. The proposed tax will range from Rs.3000 to Rs.10,000 and this will be a final discharge of tax liability. I can reassure the business community that FBR will not probe further after payment of the fixed tax by a retailer.
(v) Admissibility of 100% depreciation
Industrial undertakings and other businesses are allowed to adjust 50% of depreciation charges in the first year. This is causing additional burden and difficulty for industrial undertakings. I propose to allow adjustment of 100% depreciation.
(vi) Admissibility of tax collected from industrial undertakings at the import stage
Mr. Speaker,
Advance income tax on imports is collected under the Twelfth schedule on the classification of goods into plant & machinery, raw materials, and finished goods. Certain finished goods so categorized are used by industrial undertakings as raw material.
They are not able to adjust this tax. It is causing a crunch in their working capital and this is an anomaly in the law. It is proposed that industrial undertakings be allowed to adjust tax deducted at the import stage on all materials.
I now present proposals for an equitable taxation structure with a pro-poor bias and encouraging investment in the productive sectors of the economy. Moreover, my proposals focus on taxing the rich and unproductive sectors.