ISLAMABAD - The PTI led government is seriously contemplating to cut down the Custom Duties on raw materials in the upcoming budget to reduce the cost of doing business and increase the economic growth of the country.
The incumbent government had already decided to present annual budget aimed at increasing the GDP growth, which touched 3.94 in outgoing fiscal year. An official informed that government is likely to reduce the duties on raw materials and intermediate goods in the budget. “The reduction in duties will help reducing cost of doing of business, which will ultimately increase the exports of the country,” he said. The government is likely to eliminate Customs Duty on 200 imported items while duties on other 100 items would be reduces from 3per cent to 11per cent.
The decision would help in reducing cost of business in textile, pharmaceutical, engineering, footwear, and chemicals sectors. The government, the official said, is working for promoting industrialisation in the country to achieve the growth of up to 6per cent in next couple of years. Under the plan, the government would enhance the GDP growth to 5 per cent in next fiscal year 2021-22 and to 6 per cent in year 2022-23 from projected 3.94 per cent of the current financial year.
In annual budget 2021-22, the government would have to take additional revenue measures of around Rs480 billion to Rs500 billion to achieve the next year’s tax collection target of Rs5800 billion. The government has projected to collect Rs4700 billion in current fiscal year. Meanwhile, around Rs620 billion would be generated through 5 per cent GDP growth and 8.2 per cent inflation rate in next financial year. Therefore, the government would have to proposed new measures worth of around Rs480 billion.
Official informed that government would withdraw sales tax exemptions, abolition of concessionary sales tax rates, increase in tax burden for higher income slabs in salaried class, reduction in the number of personal income tax slabs from 11 to five and adjustment of rental income. “The government will finalise the taxation measures in the upcoming week with the approval of Prime Minister and Finance Minister,” an official of the Federal Board of Revenue (FBR) informed The Nation.
He said that government would focus on eliminating tax exemptions and installation of Point of Sale (POS) machines at branded chains in urban centres. The government in last budget had projected to collect Rs125 billion on account of PIT in the outgoing fiscal year but after introduction of reforms in the next budget the revenue collection would go up to Rs150 billion in 2021-22. The withdrawal of exemptions has been estimated to generate around Rs 140 billion in the next fiscal year.