ISLAMABAD (Web Desk) – Finance Minister Asad Umar on Tuesday has presented Finance Supplementary (Amendment) Bill in National Assembly for the remaining nine months of fiscal year 2018-2019. The bill is aimed at generating additional revenue of 183 billion rupees
Presenting amendments to the Finance Act 2018 in the National Assembly, Minister for Finance Asad Umar said the new proposals are based on the philosophy of putting no additional burden on the poor and provide relief for export oriented industries.
Measures proposed for collection of 91 billion rupees include increase in tax on banking transactions other than cash from the existing 0.4 to 0.6 percent for non-filers, increased tax on tobacco, doubling of Federal Excise Duty on vehicles of 1800 CC and above and increase of taxes on some luxury items and pricey mobile phone sets.
The minister said there would be no reduction in the exemption limit for income tax.
Similarly, existing tax rate on income slab between 1.2 to 2.4 million rupees would also be retained. However, income tax rate for higher income slabs would be 25 percent and 29 percent.
Rs1000 tax shall be imposed on annual incomes ranging from Rs0.4 million to Rs0.8 million while Rs2000 shall be imposed on salaries ranging from Rs0.8 million to Rs1.2 million annually.
Asad Omar said the Government has decided to withdraw tax exemption for Prime Minister, Ministers and Governors in respect of accommodation, conveyance and sumptuary allowance.
The Finance Minister also announced some relief measures for different segments of society. He said Petroleum Development Levy worth 100 billion rupees as envisaged in the current budget has been withdrawn for the benefit of the people.
Regulatory duty imposed by the previous government in the budget on 82 tariff lines has been abolished for raw material meant for export related industries. This would involve relief of five billion rupee for the industry.
It has been decided to launch Insaf Health Card scheme in the Federal Territory and formerly FATA on the pattern of KPK.
The development budget for the current financial year is proposed to be at 725 billion rupees, which has been slashed by 305 billion. The previous government had proposed development budget of Rs1030 billion for current FY.
The Finance Minister, however, made it clear that development budget for CPEC projects and dams would not be reduced and instead, additional resources would be mobilized for construction of water reservoirs.
The Minister said foreign debts have also surged to 95 billion dollar from 60 billion dollar.
OTHER KEY POINTS BY FINANCE MINISTER
Presently budget deficit stands at 7.1 percent.
10 percent increase in pension has been made.
Regulatory duty on raw material used for export industries would be zero to benefit export industries by Rs 5 billion.
ASSESSMENT OF COUNTRY’S CURRENT ECONOMIC CONDITION
The finance minister began his address with an analysis of country’s current economic condition. He informed that the fiscal deficit in FY18 amounted to 6.6 percent of the GDP, energy deficit was around Rs 440 billion and Sui deficit was recorded over Rs 100 billion.
In five years, foreign debt increased by $34 billion while foreign exchange reserves lead to depreciation in Pakistani rupee, he added.
The minister said that whenever depreciation surfaces every imported product rises, adding that the fiscal deficit shown totally different from the given figures. Gas agreement has been pegged with dollar while petrol and edible oils increase sharply, he told.
Umar said that tax collection was Rs 350 billion less in FY18 Budget and that deficit is higher by Rs 900 billion from the reality.
FINANCE MINISTER ASAD UMAR ADDRESSES NEWS CONFERENCE
Addressing a news conference after presenting supplementary budget in the National Assembly, Finance Minister Asad Umar said the measures announced today (Tuesday) were not the reforms programme of the government but immediate necessary steps to meet the current economic crisis.
Asad Umar said reforms in the FBR will be introduced within a month.
Minister of State Muhammad Hammad Azhar said that regulatory duty on various luxury items has been enhanced. He said taxes on cigarette will take up the price of the item up to ten rupees per packet.
He said the revenue target for the current fiscal year has been set at 4390 billion rupees.
FEDERAL CABINET APPROVES AMENDED FINANCE BILL
Earlier today, the participants of the Federal Cabinet meeting presided over by PM Imran Khan gave approval to present the amended finance bill in NA.
Asad Umar informed the members regarding increase in duty on imported items.