Budget to fuel growth: Miftah

Federal Finance Minister Miftah Ismail has said that relief announced in the budget 2018-19 will help increase the tax base, facilitate taxpayers and give an impetus to national growth. Speaking at a National Budget Seminar organized by Institute of Cost and Management Accountants of Pakistan here on Sunday, the Minister said that the budget for fiscal year 2018-19 will expand the economy by more than six percent, facilitate taxpayers, encourage growth of businesses, besides financially helping vulnerable sections of society and building infrastructure in backward areas like Federally Administered Tribal Areas (FATA).
He said taxes in the real estate sector have also been rationalized in order to shun the undocumented economy and encourage people to declare the real worth of their properties. Referring to new tax slabs recently announced by the Prime Minister, the finance minister said tax procedure has not only been simplified but its rate is also reduced to facilitate the tax payers.
He said, "With this budget I want to make life easier for people and promote businesses by increasing speed of economic growth." He said this year, GDP growth rate was at 5.8 percent while before that it was 5.4 percent and the target for 2018-19 is set at 6.25 percent. Miftah Ismail said according to the proposed budget, the taxes were lowered but it was made mandatory for people to become tax filers if they want to buy expensive property and cars. This step was taken to make them part of the white documented economy, he said.
On a question regarding increasing the petroleum levy, the Minister said the government will pass on the benefit of reduction in international oil prices as it did in previous years. The Finance Minister also emphasized the importance of enhancing manufacturing in the country in order to reduce import bill.
He said that anybody wanting to buy property worth Rs 4 million or new and imported vehicles will have to become active taxpayer. These measures will change nature of the Pakistani economy; he said and assured that the procedure for filing tax returns would be made simpler. He said tax rates for the present taxpayers' particularly salaried class are reduced. He said that the people are encouraged to accurately report buying price of property by bringing down tax rates. He informed that Pakistan has received $1 billion long-term loan from the commercial bank of a friendly country.
He said it is estimated that Rs 3935 billion taxes would be collected in current year which would be higher than 18 percent as compared to the last year while the target for next year is Rs 4435 billion, 11 percent more than in this year. He said that when economy expands, revenues also increase. He said that sales tax on import and purchase of different items has been cut to 5 percent. He said that no questions will be asked from 99.8 percent of persons receiving remittances from abroad but those who will get remittance above Rs 100 million will have to explain the sources of the funds.
The Minister said that there was no option but to devalue the dollar as it was kept artificially low for three years during which the exports were decreasing against rise in imports. He said that Pakistan's exports were $ 24 billion and $12 billion of it were consumed on oil imports. He said, "We need to encourage investment and capital formation and increase our exports faster than imports to control the current account deficit."
He said that the government will introduce measures to ensure that 100 percent children are enrolled in schools. For this purpose, he said that Rs 10 billion have been allocated for a programme to end stunting which affected 40 percent of children. He said that Rs 100 billion are proposed for building of schools, hospitals, roads and other facilities in the Federally Administered Tribal Areas (FATA).