We presented a good, balanced budget: Finance minister

Purposes of budget was to maintain economic stability and growth, reduce inflation rate, says Dr Sheikh.

ISLAMABAD: Focusing on measures taken in the budget to provide relief to the people, Finance Minister Dr Abdul Hafeez Sheikh, in his post budget press conference, claimed the government had succeeded in presenting a “good and balanced budget”.

Dr Sheikh said that the basic purposes of the budget were to maintain economic stability and growth as well as reducing the inflation rate to a single digit. Also a primary focus of the budget was to collect tax from those individuals with higher income who evaded paying taxes.

The minister highlighted the fact that the government had fulfilled its promise to the responsible tax payers of the country. “We promised tax payers that we would provide relief in the new budget and we have fulfilled that promise,” said Dr Sheikh.

Relief to tax payers

Relief measures in the budget included the income tax rate being set at the Rs400,000 slab, a 20% increment in base salaries and pensions, custom duties lowered on pharmaceutical raw materials and stationery items and allocation in the budget for creating 100,000 jobs for graduates.

Taxation measures included setting a bar of 16% sales tax on all products higher than this percentage while maintaining sales tax rates on all products below it.

The federal minister said that the government wished to remove the burden of taxes from the common man. “We want only two taxes to exist in Pakistan: income tax and sales tax,”  he said.

Turnover tax on income of businesses was slashed by 50%. “Turnover tax on total income has been brought down to 0.5% from 1%, a move that will increase liquidity and cash flow,” said the minister.

Steps to curb energy crisis

The minister said that solar tube wells would be introduced in the country and these projects will be given subsidies by the government. “The percentage of the subsidies will be set in a few days,” said Dr Sheikh, adding, that this measure would help Pakistan become “less dependent” on oil imports that were required for generating electricity.

Speaking on the major issue of electricity, the federal minister said that the shortfall could not be dealt with just by allocating finances, but the government did whatever it could through the budget by allocating Rs183 billion directly and some more through the developmental program and other allocations.

“The problem will be solved when issues in the administrative infrastructure and other governance issues are resolved.

Developmental programs for generating electricity are being initiated,” he said, adding, “Expenditure for generating electricity is more and electricity charges are less. The federal government has financed this gap of billions of rupees till now.”

Reducing government expenditure

The finance minister also announced that the scrutiny and criticism that the government faced dues to its expenditures was being answered in this budget starting with converting the Prime Minister House into an “international institute for advanced studies”.

“Taking this spirit forward, all governmental expenditures will be reduced,” he said.

Dr Sheikh said that Pakistan was becoming self-sufficient. “The country which used to import wheat and sugar is now capable of exporting them to other countries,” said the finance minister.

Inflation rates

Answering questions relating to the questionable inflation rate, the minister said that all figures used by the government were set by the statistical department. "They are accepted by all," he said. "You should trust these figures."

The minister added that it is not only the people or leaders of political parties who are affected by inflation, but the party who has been elected by the people also gets affected.

“Our policy is to lessen the fiscal deficit and loans. We have also lessened our expenses, and this is how inflation has been reduced in the past three years,” he said and added that no other government has collected as much tax in one year as the ruling government did in the last year.

Tackling rising oil prices

Explaining the issue of rising oil prices, Shaikh said that it was the regulatory authorities were responsible for keeping checks on when oil prices rise so that people do not think that the government is tampering with these prices.

“When prices rise in the world, the government tries its best to not let the common man be affected by the hike. This is why we give subsidies and this is why we have spent Rs250 billion for the cause.”