Published in The Nation newspaper on 05-Jun-2014
ISLAMABAD - Finance Minister Senator Ishaq Dar on Wednesday ruled out the possibility of increasing power tariff after slashing the power subsidies in the recently announced budget 2014-2015.
“There will be no power tariff hike after the budget as the government will provide subsidy on electricity to the consumers using 200 units a month,” said Ishaq Dar, talking to The Nation after the post-budget press conference here. The government has cut the power subsidies by over Rs 100 billion in the budget.
One of the officials of the Finance Ministry, wishing not to be named, said the government might increase power tariff after reducing subsidy in the budget. However, the finance minister rejected this idea.
Earlier, addressing a post-budget press conference, Finance Minister Senator Ishaq Dar dispelled the impression that budget 2014-2015 was ‘peanut’ for the poor as the government has taken several steps for their betterment.
“More than half of the country’s population (90 million) is living below the poverty line, earning less than two dollars per day. Therefore, the government wants to improve their living standard,” the finance minister said. He added the government has not only increased the volume of Benazir Income Support Programme to Rs 118 billion from Rs 75 billion, but has also enhanced the number of families to 5.3 million from 4.8 million in the recent budget.
He also defended the ambitious targets set by the government in the budget for the fiscal year 2014-15. “I believe in setting difficult targets,” he said in regard to the budget. “If we set easy targets from the beginning as per our tradition, we will obviously deliver less,” said the finance minister.
Ishaq Dar further said the current budget would revive the industry and agriculture sector of the country.
Talking about the massive taxation measures worth Rs 231 billion, the finance minister said the government neither imposed any tax on the poor nor on food items. The government has eliminated tax exemptions worth Rs 103 billion, granted to powerful groups and taken new taxation measures worth Rs 128 billion in the budget. He said the government has embarked upon a programme to phase out discriminatory SROs in three years.
“We have to eliminate the culture of tax nonpayment,” he said and added that Pakistan cannot progress with just 0.8 million taxpayers in the population of 180 million. “The new taxation measures are to bring non-taxpayers into tax net as the government has imposed tax on foreign air tickets and purchase of property, which is refundable if someone files return and shows income,” Ishaq Dar remarked. The finance minister said there are 2.5 million retailers in the country, but just a few thousand are registered. He said chain stores, shops in air-conditioned buildings and those accepting credit and debit cards will have to get themselves registered compulsorily. Similarly, he said, those with electricity bills of Rs 50,000 and above will also have to get themselves registered with the tax department. He said the new federal budget is aimed at ensuring good governance, eliminating corruption, plugging leakages in taxes and expanding the tax net.
Ishaq Dar further said budgetary proposals contain no measure that could lead to increase in prices of cement. He warned the government would not allow cement manufacturers to create artificial price hike, adding stern action would be taken against profiteers.
Dar said the government has also enhanced the minimum wage rate to Rs 12,000 from Rs 10,000 per month. Similarly, the government has increased the minimum pension to Rs 6,000 per month in the budget from Rs 5,000, he added. He also recalled the government’s decision of increasing salaries and pensions by 10 percent. “We had the option to increase salaries by 20 percent, but it was not possible without taking loan of Rs 42 billion,” he remarked.
The finance minister said the budget contains a number of measures to promote exports as prosperity is not possible without increase in exports. He said an EXIM bank on the pattern of China and the United States would be established. Dar said the government is working on Health Insurance Scheme for the benefit of the poor. He said the budget contains special incentives for less developed regions of Fata, Gilgit-Baltistan, Balochistan and Swat.
He held Qarz-e-Hasna and Prime Minister’s youth schemes are aimed at pulling these people out of poverty. He said 3,000 farmers would be given credit worth Rs 100,000 each.
Dar said that appreciation of rupee has helped reduce Rs 600 to 700 billion loans of the country and credit of this achievement goes to government's policies.
The Minister said this was a very difficult task but achieved through tough decisions.
Dar further said that one Member National Assembly had promised to resign if the dollar depreciated below Rs 100.
"I am still waiting for his resign. But I am not in favor of his resignation on this matter."
Replying to a question, the finance minister said just like Pakistan Army's budget, the salaries and pensions of the EOBI are also covered in the funds allocated to the organization.
He said the EOBI was an independent organization and its affairs are run by a Board of Directors; however, through a letter he would ask the management to ensure that their pensioners also benefit the relief.
Dar said that three-month long vocational training programme will be launched to train 120,000 men and women in textile sector during five years.
He said skill was required in the textile sector, especially in the value-added sector such as garments and made-ups.
He said around Rs 4.4 billion has been purposed in the budget to achieve the target.
He said the trainee would also be provided stipend of Rs 8,000 per month and textile industry and TEVTA institutes would jointly train the people.
Dar said in the Budget 2014-15, the government has introduced several new initiatives including cash prize scheme through draw for taxpayers to promote tax culture in the country.
"We will gradually eliminate culture of non-filing of tax returns and for this some extra taxes have also been introduced for rich people and those who are not registered tax payers", Dar.
The minister announced advance tax on first and business class airline tickets, advance tax on purchase of immovable property, advance tax on electricity bills over Rs 100,000 per month, higher advance tax on interest income and dividends, higher advance tax on cash withdrawal by non-filers, higher advance tax on car registration by non-filers, removal of inequities, taxation of accounting income, removal of tax loopholes, tax rates for services, changes in final tax regime, application of tax on foreign institutional investors and mandatory requirement of NTN. The minister said that those officials of Federal Board of Revenue (FBR) who have not yet filed their tax returns have been given deadline to pay their returns with fine before June 10, 2014, otherwise they would be deprived of their bonuses and allowances.
Published in The Nation newspaper on 05-Jun-2014