Taxes exemption on edibles, medical bills, GP fund

Taxes exemption on edibles
Taxes exemption on edibles, medical bills, GP fund

ISLAMABAD: Finance Minister Shaukat Tarin Friday announced that there would be no increase in the power tariff, while Rs5,800 billion tax collection target would be met through automation and bringing changes in the tax system.

Winding up debate on the federal budget, Tarin said the government will focus on growth strategy to create new jobs and enhance the people’s income level.

“We have achieved stability and are heading towards an inclusive and sustainable growth to create job opportunities and increase income level,” he said, adding that the IMF had also been conveyed that the government would not increase the power tariff. He said the government would address the issue of circular debt by improving recoveries and controlling line losses through better management. Tarin said the tax imposed on medical bills and GP fund of employees was also being withdrawn, while tax imposed on milk had also been waived off.

However, he said there would be no tax on internet and SMS, while the users would be charged only 75 paisas for a call exceeding five minutes.

The minister said the government had already introduced reforms in the Federal Board of Revenue (FBT) to change the system through automation of FBR and ensure transparency for achieving revenue collection targets.

He told the House that during the first 11 months of the ongoing fiscal year, a collection of Rs4.1 trillion had been made, while Rs4.7 trillion would be collected by the end of the current month.

The finance minister said Prime Minister Imran Khan had taken bold and difficult decisions to steer economy in the right direction adding that despite the COVID-19 challenge, the country achieved four percent growth during the current fiscal year due to the interventions made by him in different sectors, including industries, housing and construction and the agriculture.

“The measures taken by the government during the COVID-19 pandemic were appreciated by the world. The government opted for smart lockdown and avoided complete lockdown so that economy continues to move,” he said.

Tarin said the government itself projected 2.1% growth, the IMF 1.3% and World Bank 2% whereas the interventions made by Prime Minister Imran Khan resulted in 4% economic growth which had gone down to 0.5%.

He also announced a series of relief measures for different sectors.

He said the tax relief earlier given to the auto sector for vehicles up to 850 cc is being extended to 1,000cc vehicles, while the tax imposed on medical bills and GP fund was being withdrawn.

The minister said there would be zero tax on the registered IT platforms and only two percent for the unregistered ones.

He said there would be 17 percent tax on the value added products of gold, while tax on poultry was being reduced from 15 to 10 percent.

On textile products, the tax has been reduced from 12 to 10 percent. Similarly, tax rate on the real estate has been reduced. Under the construction package, the ratio of income tax has been reduced from 35 percent to 20 percent.

He said tax relief had also been given to oil refineries so that they could turn to Euro-5 fuel. The minister categorically stated that no tax had been imposed on flour and its products.

Tarin said the budget had given a hope to all tiers of the society. He said the budget envisaged a comprehensive plan for the uplift of four to six million poor households.

Under this plan, these households will be provided with affordable houses. The rural households will be given interest free loans of up to three hundred thousand rupees for the agriculture productivity besides two hundred thousand rupees for purchase of equipment.

He said five hundred thousand rupees of interest-free loans will be provided to each deserving household in the urban areas to start their businesses.

He said these poor households will also be provided with health cards. The minister said the allocation for Ehsaas Program had been enhanced to Rs260 billion to provide assistance to under-privileged segments of the societies.

He said the government will provide targeted subsidies to the low-income groups on power tariff, flour, ghee and sugar.

The minister said tax collection for the next fiscal year had been fixed at Rs5,800 billion.

“We are bringing changes in the tax system and introducing automation. He said 12 withholding taxes had been withdrawn as these were regressive in nature.

Tarin said the government had increased the annual PSDP by 40% from Rs630 billion to Rs900 billion.

He said projects pertaining to transport and energy as well as development of backward areas including Balochistan, Tribal Areas, Gilgit-Baltistan had been given priority in the development plan to bring prosperity and reduce poverty.

He said 1.1 billion dollars had been earmarked for purchase of anti-COVID vaccine, while Rs5 billion had been set aside for the development of E-voting system.

Taxes exemption on edibles
Taxes exemption on edibles, medical bills, GP fund