ISLAMABAD: Adviser to Prime Minister on Finance, Abdul Hafeez Shaikh, said on Wednesday that the federal government will not impose new taxes in the budget for the next fiscal year, ARY News reported.
Abdul Hafeez Shaikh, while talking exclusively to ARY News programme ‘Power Play’, elaborated the preparations of the federal government to finalise the next budget. He said that the matter of salaries was an important phase of a budget which is usually approved by the federal cabinet during the last days of finalising the budget.
“We will try to formulate a new budget in light of the expectations of the nation by reducing taxes. We have met all stakeholders for preparing the budget and received more than 300 recommendations while more than 200 recommendations were approved so far.”
Shaikh said that the national economy was quite stabilise before the spread of coronavirus as the economic growth was moving ahead and the government had not acquired a single penny from the State Bank of Bank (SBP) in one year. The government has also managed to significantly reduce its expenditures, he added.
“The export rate of Pakistan stood at zero during the last five years and the present government increased its exports. The taxes were increased up to 17 per cent before the spread of coronavirus and later the pandemic dented the country’s revenue and income. The Gross Domestic Product (GDP) of Pakistan witnesses reduction up to 4 per cent after the pandemic.”
Highlighting the expenditures of relief packages amid pandemic crisis, Abdul Hafeez Shaikh said that a huge sum of money was distributed among needy people under the Ehsaas programme by the federal government, whereas, easy loans were being given for payroll to stop unemployment.
“How will we pay loans if taxes are not collected. However, the federal government will not impose new taxes in the upcoming budget. We will try to focus on tax collections besides further reducing our expenditures. Pakistan gets relaxation in Rs1.8 billion worth loan payment by G20 countries due to coronavirus pandemic.”
“The income rate of the country was reduced due to the imposition of lockdown measures. The country is likely to witness a reduction of 1,500 billion revenue due to the pandemic.”
“Government reduced the interest rate to 8 per cent from 13.50 per cent. The pandemic has also dented the exports, however, remittance was not affected. The economies of China and Europe are gradually recovery after it was badly affected by COVID-19.”
“The value of Pakistani currency was artificially maintained by the previous governments. The present government increased foreign investment up to 100 per cent while Islamic Sukuk was acquired on low rate. The government has made an all-out effort to reduce prices of petroleum products.
“Inflation will be reduced further after another cut in prices of petroleum products especially petrol and diesel. At this time, the inflation rate downgraded to 8 per cent from 11 per cent. The government is charging 17 per cent tax on petrol while a levy of Rs30 per litre was being charged on other petroleum products. The petroleum levy is reduced when the oil prices are increased. However, the government cannot charge the levy on petroleum products more than Rs30 per litre. Provincial governments have right to give subsidies and the federal government could not intervene in their decisions.”
“It is responsibility of both federal and provincial governments for price control in Pakistan. The crisis will occur if the distribution of commodities is affected. The provincial governments should see this matter why the prices are not reducing despite the cut in petroleum prices. The issue of locust attacks on crops will also be resolved by the government soon.”
“The circulatory debt stands at more than Rs20 trillion, whereas, no shortfall of electricity exists in Pakistan as 25,000 megawatts electricity is being generated. The electricity requirement of Pakistan is 15,000 megawatts.”
“Pakistan’s top priority is its defence and the federal government will fulfil all requirements for the defence budget. The government will not compromise on the country’s defence as it is our first priority.”
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