Incentives for businesses in next budget: Hafeez

Present economic policies will remain in place.

ISLAMABAD: Federal Finance Minister Dr Abdul Hafeez Shaikh has said that the government will give incentives to the business community and people to achieve economic stability in the next budget.

Addressing the “Pre-Budget Seminar 2012-13” organised by the Express Media Group and the University of Lahore on Thursday, the finance minister said the government had no plans to formulate a special budget keeping in view the upcoming elections. “Budget will be prepared in such a way that present economic policies will be continued.”

“The government will reduce customs duty and eliminate federal excise duty from some more items,” Shaikh said, adding focus would be on achieving economic stability to enhance growth.

“We are asking the US, European Union and neighbouring countries to open their markets for Pakistani products and incentives will be given in customs duty to increase trade,” he said. “We also plan to enhance allocation for the public sector development programme (PSDP) in the budget.”

He pointed out that austerity measures would be taken to cut expenditures and reduce borrowing from banks so that the private sector could get loans for investment in business. “The tax system will be improved to bring more under the tax net.”

He declared that salaries of government employees would be increased in line with inflation and a special programme would be launched to provide employment to 100,000 youth.

The Benazir Income Support Programme (BISP) would also be continued to provide aid to the vulnerable people of society.

Speaking on the occasion, Federal Board of Revenue (FBR) Chairman Mumtaz Haider Rizvi said tax collection had increased by 26% in 10 months of the current fiscal year compared to the corresponding period of last year. “Tax-to-GDP ratio may go up to 10.3% in the year,” he hoped, and rejected allegations of poor economic performance.

Former commerce minister Humayun Akhtar asked the government to announce the date of elections after unveiling the budget for 2012-13.

“The government is exaggerating figures every year and revenue numbers are revised,” he alleged and said the government was cutting the development budget, which was a major contributor to  the country’s growth.

“The economic situation worsened after 2008, therefore, people transferred money to foreign banks,” he said, adding the government had played the Sindh card and now was playing the south Punjab card for political gains.

“The country is facing a crisis of leadership and the time is ripe to conduct new elections,” he said.

Saarc Chamber of Commerce and Industry Vice President Iftikhar Malik said the government should bring the agricultural sector, hotels, clinics and doctors into the tax net in the upcoming budget. “The government should form a five-year or ten-year economic policy to ensure continuity that will bring confidence in the private sector in making future investments,” he said.

Published in The Express Tribune, May 18^th, 2012.