Development budget to be slashed again
Budget slashed by Rs100bn from the budgeted Rs280bn and may be slashed further, says finance minister.
KARACHI:
Federal Finance Minister Dr Abdul Hafeez Shaikh has said that the government has slashed the Public Sector Development Programme (PSDP) by Rs100 billion from the budgeted Rs280 billion and it will be further reduced in coming days.
Shaikh was talking to the business community at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday.
He said people who criticised the government for high expenditures should understand the ground realities. “Those who are having cocktail parties should know that the government has frozen expenditures at the level of last year and has also cut the PSDP,” he said.
He reiterated that the reformed general sales tax (RGST) will document the economy and will also reduce inflation. Sales tax will be reduced to 15 per cent from 17 per cent and it has already been announced that daily necessities will not be taxed, he said. “But unfortunately people with vested interests are opposing it just to stop the documentation of economy.”
Shaikh said that it is necessary to document the economy, otherwise “we cannot think of sustainable progress as we do not have enough resources to meet our burgeoning expenses. We also need to think for our rising security demand and the government needs to cater to this as a priority.”
On rising international crude prices, he said that the government cannot reduce oil prices and if oil prices continue to rise, the problems of the government and the country will mount. “It is necessary to transfer the rise in oil prices to the consumers, otherwise the government will have to face an increase in budget deficit.”
The government has utilised all national and international channels, including loans from the International Monetary Fund and the State Bank because of its financial problems but now it is essential to increase tax collection. “Every taxable income must come under the tax net.”
“We need to take unusual steps to control financial problems, including how to reduce foreign loans. The government is taking all political parties into confidence and hopes that this will bring results,” he said.
Levying income tax on the agriculture sector is a provincial matter and the federal government can only help provincial governments, but it cannot dictate them, he added.
The business community asked the minister to take it into confidence over RGST and other matters related to the economy. They also called for privatising public sector organisations like Pakistan Steel and Pakistan Railways to make them profitable.
Published in The Express Tribune, January 23rd, 2011.
Federal Finance Minister Dr Abdul Hafeez Shaikh has said that the government has slashed the Public Sector Development Programme (PSDP) by Rs100 billion from the budgeted Rs280 billion and it will be further reduced in coming days.
Shaikh was talking to the business community at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday.
He said people who criticised the government for high expenditures should understand the ground realities. “Those who are having cocktail parties should know that the government has frozen expenditures at the level of last year and has also cut the PSDP,” he said.
He reiterated that the reformed general sales tax (RGST) will document the economy and will also reduce inflation. Sales tax will be reduced to 15 per cent from 17 per cent and it has already been announced that daily necessities will not be taxed, he said. “But unfortunately people with vested interests are opposing it just to stop the documentation of economy.”
Shaikh said that it is necessary to document the economy, otherwise “we cannot think of sustainable progress as we do not have enough resources to meet our burgeoning expenses. We also need to think for our rising security demand and the government needs to cater to this as a priority.”
On rising international crude prices, he said that the government cannot reduce oil prices and if oil prices continue to rise, the problems of the government and the country will mount. “It is necessary to transfer the rise in oil prices to the consumers, otherwise the government will have to face an increase in budget deficit.”
The government has utilised all national and international channels, including loans from the International Monetary Fund and the State Bank because of its financial problems but now it is essential to increase tax collection. “Every taxable income must come under the tax net.”
“We need to take unusual steps to control financial problems, including how to reduce foreign loans. The government is taking all political parties into confidence and hopes that this will bring results,” he said.
Levying income tax on the agriculture sector is a provincial matter and the federal government can only help provincial governments, but it cannot dictate them, he added.
The business community asked the minister to take it into confidence over RGST and other matters related to the economy. They also called for privatising public sector organisations like Pakistan Steel and Pakistan Railways to make them profitable.
Published in The Express Tribune, January 23rd, 2011.