Federal Minister for Finance Senator Muhammad Ishaq Dar on Saturday said the Federal Budget 2015-2016 was poor-friendly and the government would not allow anyone to increase the prices by using the name of budget.
Addressing the post-budget press conference at the P-Block of Pak Secretariat here, the minister said he didn’t agree to the perception that the budget 2015-2016 had increased the burden on the poor.
“The government has raised the tax rate on Capital Gains Tax (CGT) and enhanced the rate on dividend income, so the burden has increased for the rich segments,” said the minister.
Ruling out the possibility of including circular debt on books, he said the government would not pick up the begging bowl to meet the financing requirement of Rs120 billion for the Temporarily Displaced Persons (TDPs) and would collect Rs20-22 billion with the imposition of super tax on 200 people and companies.
“The circular debt has nothing to do with the budget, as it is the issue of receivables and payables of the Ministry of Water and Power.
We only provide subsidy amount in line with the calculation made by the regulator Nepra to protect consumers using up to 200 units.
“The amount of circular debt stands at around Rs270 billion not Rs400 billion,” said Dar.
The salary bill, he said, will increase by Rs47 billion after merging two allowances, jacking up the medical allowance by 25 percent and granting 7.5 percent allowance as the total impact on take home salary of public sector employees will go up in the range of 11 to 14 percent.
The minister said the merger of two allowances would benefit those pensioners who would be retiring in near future.
The minister was accompanied by Special Adviser to the PM on Revenue Haroon Akhtar and the whole economic team. During the press conference, a journalist tried to criticise the minister saying that he had abandoned the technical briefing of the FBR that resulted into mistakes in interpretation of taxation related matters of the budget in the print and electronic media. The minister was annoyed at this observation and there was tension for a while. The situation was, however, normalised soon.
To another query about the share of direct and indirect taxes, he said the share of direct taxes had increased by 3 percent last year and focus would remain on following this direction.
When he was asked about the timeline for elimination of tax exemptions being enjoyed by the president, governors, judges and armed forces personnel on their perks, the minister asked the media to make an environment in this regard so he would be ready to consider them in years ahead.
The minister termed the budget 2015-16 pro-poor and pro-growth, saying that it would boost theeconomic activities and generate 2 to 2.5 million jobs during the next financial year.
“After achieving stabilisation, our focus is on higher growth so we give incentives to major drivers of growth including agriculture, construction and manufacturing sectors,” he added.
The minister made it clear that the government would be ready to accept any good proposal that could be incorporated till the winding up of speech at the time of approval of the budget.
“With PTI or no PTI, we are ready to accept any proposal for the betterment of Pakistan,” he said and added that he would ask all the political parties to sign the Charter of Economy for 3, 5 or 10 years to give one direction to the economy irrespective of political divide.
The minister explained that wheat subsidy for Gilgit-Baltistan was not abolished as aired by some TV channels at the time of elections as the government had allocated Rs6.5 billion for providing wheat subsidy.
He said there would be no change in the price of ghee and cooking oil and tax on fertiliser consolidated for wholesalers and distributors having no increase in taxation incidence.
He also said the government did not increase the Regulatory Duty (RD) on High Speed Diesel (HSD) and furnace oil. On the import of cement, he said the duty was imposed with the purpose to protect the local industry.
Packaged yogurt and cheese have been brought into the tax net, he said and added that there was no tax imposed on milk.
On mobile phone, he said the regulatory duty was abolished to bring down the tax burden on two tiers but tax on expensive phones was increased from Rs700 to Rs1,000, jumping up by Rs300 on phone set in the price range of Rs70,000. On the internet, he said tax was rationalised as it was imposed on use of Evo.
The special pay of private secretary was doubled which would have an impact in the range of Rs100 to Rs1,000 in their monthly salary.
He said the government had allocated Rs100 billion in the development programme to rehabilitate the TDPs in the aftermath of a military operation, so the remaining Rs20-22 billion would be generated through imposition of super tax on 200 individuals, association of persons and companies exceeding Rs500 million income.
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