Govt not to burden taxpayers: Hafeez

Muhammad Anis
ISLAMABAD: Federal Minister for Finance Dr Abdul Hafeez Sheikh on Wednesday said the tax collection system would be improved for revenue generation and the fiscal deficit would also be reduced by four percent in the next fiscal year.

Winding up the debate on the budget, the finance minister maintained that the government would not put any burden on those who were already paying taxes while those who had been reluctant to pay taxes would be included in the tax net.

The debate on the budget for the fiscal year 2011-2012 concluded on Wednesday without the participation of opposition parties, including the PML-N, Jamaat-e-Islami (JI) and Like-Minded group of the PML, which have been protesting against the nomination of Maulana Abdul Ghafoor Haideri as the opposition leader. They again were not present in the House during the closing speech of the finance minister on Wednesday.

Prime Minister Syed Yousuf Raza Gilani, who was present in the House, listened to the winding-up remarks. The finance minister said despite several challenges, the government had taken difficult but concrete decisions to improve the economic condition of the country due to which the fiscal deficit had reduced to 6.3% from the last year’s 7.6%.

The minister told the upper House that with the help of National Database and Registration Authority (Nadra), around 700,000 wealthy people had been traced who would be included into the tax net.

He said nearly 77,000 people had already been issued notices, out of whom 10,000 people had sent their replies while 1,000 new people had been brought under the tax net. He also announced the government would simplify the tax collection system by introducing

only two forms of taxes. He said the government had included some other sectors into the tax net, including textile, surgical equipment and sports items for income generation.

Sheikh said the government had taken care of the problems of common man and avoided imposing tax on items of daily use, including food items. He said the country’s economy was moving in the right direction and an estimated one billion dollars were being received as remittances every month while the foreign exchange reserves were now over $17 billion. He said the provinces could impose the agriculture tax as everybody must share in resource mobilisation.

Dr Sheikh said the government had fixed the target of $22 billion for exports and hoped that the country’s exports would cross the target and reach up to $25 billion. He said that out of 397 items, 392 had been completely exempted from the regulatory duty and announced that there would be complete exemption of the federal excise duty on 97 items within two years. He added the federal excise duty would be exempted from 17 items during the next fiscal year while it will also be reduced on some items the same year.

The minister said an additional amount of Rs700 billion will go to the provinces as a result of the Finance Commission Award announced last year, which will be used for the welfare of people in sectors like health, education and provision of soft drinking water to them.

He added with the utilisation of this huge amount, service delivery system will improve and provinces’ resources will enhance.

He said, overall, the provinces had increased 32% budget for the health and education sectors for the next fiscal year. “Though health and education are now provincial subjects, the federal government has decided to continue the ongoing programmes of these sectors,” he said.

He further said an amount of Rs65 billion had been allocated for the Benazir Income Support Programme (BISP) for the next fiscal year against the amount of Rs35 billion, which was allocated for the current year.

He said the cash amount was directly transferred to four million people of the country for their well-being under the BISP.

He said an amount of Rs02 billion had been allocated for the Pakistan Baitul Mal while around two million people would get assistance from macro finance scheme.

The minister said an amount of Rs730 billion had been allocated for the next fiscal year under the Public Sector Development Programme against the current allocation of Rs300 billion.

He said all the institutions of the country were working in a smooth way as standing committees were active in the country and the media was free and independent to report anything while a central leader of a political party was heading the country’s major body, responsible for accountability of the government.

He said when the present government came to power, the country’s economy was in a bad condition as fiscal deficit had reached 7.6%, foreign exchange reserves were Rs 6 billion and inflation rate was 25%.

He said the heavy floods across the country badly affected the growth of national economy, which destroyed 1.6 million houses in the affected areas, besides causing damage to schools, hospitals, oil refineries and roads infrastructure. He said according to international world, the economic loss from the flood was $10 billion, adding an estimated 2% growth rate was also affected due to the floods.

He said 30,000 civilians and 5,000 Army personnel and officers had lost their lives in combating terrorism, and the government’s expenditure was increased due to its commitment against terrorism.