ISLAMABAD, Pakistan: The Federal Minister for Finance Shaukat Tarin has said that the federal government will focus on a growth strategy to create new job opportunities and enhance the income levels of the people.
“We are heading towards an inclusive and sustainable growth,” the finance minister said while winding up the discussion on the Federal Budget 2021-22 at the National Assembly in Islamabad on Friday.
The finance minister said that Prime Minister Imran Khan took bold and difficult decisions to steer the economy in the right direction.
Shaukat Tarin said that despite the COVID-19 challenge, we achieved the four percent growth in the outgoing Fiscal Year 2020-21 due to the interventions made in different sectors including industries, housing and construction, and agriculture.
The following are series of relief measures for different sectors announced by the Finance Minister;
- Tax relief for vehicles up to 850 CC being extended to 1000 CC vehicles
- Tax on medical bills & GP fund being withdrawn
- Tax on the milk waived off.
- No tax on Internet & SMS
- Only 75 paisas will be charged on Call of more than 5 minutes
- Zero tax on registered IT platforms while only 2% for unregistered ones
- 17 percent tax on value-added gold products
- Tax on poultry being reduced from 15% to 10%
- Tax on textile products reduced from 12% to 10%
- Tax rate on real estate reduced
- Ratio of income tax reduced from 35% to 20%
- Tax relief to oil refineries for Euro-5 fuel
- No tax on flour & its products
- 12 withholding taxes withdrawn
In his speech, the Finance Minister Shaukat Tarin said that the Federal Budget 2021-22 has given a hope to all tiers of the society.
The finance minister said that the budget envisages a comprehensive plan for the uplift of four to six million poor households.
Under the plan, these households will be provided with affordable houses. The rural households will be given interest-free loans of up to Rs 300,000 for agriculture productivity besides Rs 200,000 for the purchase of equipment.
Shaukat Tarin said that Rs 500,000 interest-free loans will be provided to each deserving household in the urban areas to start their businesses. He said that these poor households will also be provided with health cards.
The minister said that the allocation for the Ehsaas Program has been enhanced to Rs 260 billion to provide assistance to underprivileged segments of the societies. He said that the government will provide targeted subsidies to the low-income groups on power tariff, flour, ghee, and sugar.
The finance minister said that the tax collection for the next Fiscal Year 2021-22 has been fixed at Rs 5,800 billion.
“We are bringing changes in the tax system and introducing automation,” he said.
Shaukat Tarin said that the government has increased the annual Public Sector Development Programme (PSDP) by 40 percent from Rs 630 billion to Rs 900 billion.
The minister said that projects pertaining to transport and energy as well as the development of backward areas including Balochistan, tribal areas, and the Gilgit-Baltistan region have been given priority in the development plan to bring prosperity and reduce poverty.
The minister said that US$ 1.1 billion has been earmarked for the purchase of the anti-COVID vaccine.
Likewise, Rs 5 billion has been set aside for the development of the E-voting system.
The finance minister pointed out that Pakistan has become a net food importer and the present government will now spend on the Agriculture Sector to achieve self-reliance. He said that a plan has been formulated in cooperation with the provinces to uplift the Agriculture Sector. He said that cold storages and warehouses will be established and a network of agri-malls will be spread across the Country to eliminate the role of the middle man.
Furthermore, the minister said that the incentives of Rs 40 billion will be given with an aim to increase the competitiveness of the Industrial Sector of the economy.
The finance minister said that tax relief has been given to the Small and Medium Enterprises (SMEs) Sector and loans of Rs 100 billion will be given to them on a markup of nine percent. He said that we are also bringing a new Auto Policy and the “Meri Gari Scheme” will be introduced.
Shaukat Tarin said that the incentives given to the export-oriented industries will be continued during the next fiscal year. He said that our aim is to enhance our export base by encouraging the exports in different sectors.
Shaukat Tareen expressed satisfaction over the growth of IT Sector, saying our aim is to bolster their exports from US$ 6 billion to US$ 8 billion in the next two to three years.
The finance minister further said that we are also establishing Special Economic Zones (SEZs) under the China-Pakistan Economic Corridor (CPEC) project. He said that we are engaged with China for the relocation of their industries to these zones. He said that investment from other Countries will also be brought in these SEZs.
Turning to the Power Sector, the finance minister said that there will be no increase in the tariff and this has also been conveyed to the International Monetary Fund (IMF).
Shaukat Tarin was confident that the flow of Circular Debt will start reducing from the next fiscal year.
The minister added that sufficient funds have been earmarked for the construction of dams in the Country.