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ISLAMABAD: While unveiling 2021-22 budget plan, Finance Minister Shaukat Tarin said on Sunday that he would be reaching out to the opposition parties with the permission of the Prime Minister to develop consensus on consistency in policies through ‘charter of economy’ for achieving inclusive and sustainable growth for the long term.

Speaking at a virtual event organised by Institute of Policy Reforms “on 2022: Balancing Stability and Growth”, Finance Minister said that the first priority of the forthcoming budget would be increasing Rs1 trillion revenue to achieve Rs5.8 trillion tax collection in a way that people already paying taxes are not burdened. The minister said that the government would do away with the harassment of the Federal Board of Revenue (FBR) in the coming budget and a universal self-assessment system would be introduced, with third party audit of three to four percent of the population would be done on risk basis.

However, a cell would be established to gather data of tax evaders based on their consumption pattern of electricity and other utility bills through use of technology – to enable the government of taking punitive action against them and sending them behind the bars, the minister added.

He also regretted the very dismal tax-to-GDP collection of below 10 percent and stated that the government would increase Points of Sales (POS) from existing 80,000 to 500,000 and announce prizes for those paying sales tax through POS linked with the Federal Board of Revenue (FBR). The idea, he said is to encourage consumers for demanding sales tax receipts from the retailers or move to other shop. This would help the government to increase the GST contribution to tax collection considerably, he said before moving on to his second priority in the budget.

The government second priority in the budget would be to increase public sector development spending for moving on the path of inclusive and has allocated Rs900 billion for the next fiscal year. The planning commission has started the public private partnership and Rs900 billion would have great impact on the ground with the participation of the private sector, he added.

Shaukat Tarin said that the government would be providing incentives to the productive sectors: industry, agriculture and services with special focus to increase exports and ensure food security as well as to provide employment opportunities.

He said that agriculture sector would be foremost priority in the budget for the next fiscal year and large incentives package would be announced besides offering free collateral for the first time in the country to small and medium enterprises. The entire agriculture chain would be focused on developing storage facilities for farmers.

Additionally, the government would also be taking care of prices especially food inflation through administrative measures of market mechanism and taking away huge margin of the middle man. The Minister said that the government may have to restore price magistrates, which were removed during the former military ruler General (retd) Pervez Musharraf, to keep an effective check on the prices. The government would also adopt bottom up approach to protect the low income group from going into poverty.

He said that he has already instructed the commerce ministry to explore other areas of exports and the government would be incentivising them to increase the value added exports. The government would also be incentivising exports through SEZs and decided not to apply 1.5 percent turnover tax in SEZs besides efforts to increase the IT sector’s exports from existing $2 billion to $8 billion in 2023, he said adding that there is need to bring foreign direct investment in the export sector.

The Minister said that challenge of circular debt would be tackled through innovative ways as the prime minister was against increase in electricity tariff because people are already heavily burdened. The minister said that due to past contracts the government was paying in the form of capacity payment in the power sector for unproduced and unutilised electricity that would increase to Rs1.45 trillion per annum after few years.

On the issue of charter of democracy, he said that he would love to have a charter of the economy and had good relations with some people in Pakistan People’s Party and Pakistan Muslim League (Nawaz). He added that he would be meeting with the Prime Minister Imran Khan for seeking the permission to reach out to these people. “We can make plan but these could be disrupted by the political forces so there is need of charter of the economy,” he said. The minister said that government may launch Sukuk, Panda Bonds as well as sale of RLNG based power plants and mobile phone spectrum to mobilise resources and some tax exemption may be withdrawn.

Earlier, CEO of IPR, Humayun Akhtar Khan in his welcome remarks said that economy was almost close to collapse when the Pakistan Tehreek-e-Insaf came to power owing to 6 or 6.5 percent current account deficit.

Copyright Business Recorder, 2021


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