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ISLAMABAD, Sep 18 (APP):Minister for Finance, Asad Umar Tuesday said that the government had not proposed to impose any extra burden on middle and lower segment of the society and all the extra taxes were being levied on the upper income class in the supplementary budget.
While addressing a press conference here after presenting the Finance (Amendment) Bill, 2018 in National Assembly and the Senate, Asad Umar said the amendments in the budget were inevitable due to numerous overambitious estimations in the budget presented by former minister for Finance, Miftah Ismail in May this year.
The government overestimated revenues by Rs 350 billion and understated expenditures by Rs 250 billion, he said adding in total, there was a Rs 890 billion difference in the projected and budgeted figures for the deficit.
He said the country was undergoing severe economic crisis therefore the government took emergency measures to relieve these crisis.
The minister claimed that 100 percent additional burden was put on the wealthy people and non-filers, while the poor segment of the society was given relief in various sectors.
Asad Umar said previous fiscal year ended with a current account deficit of over $18.1 billion and if the present government could not introduce extra measures, the deficit could touch the $21 billion mark by end of current fiscal year.
He said in order to boost exports of the country which were main source of increasing foreign exchange reserves, the government had proposed special relief measures on export sector including reducing gas price for all the zero rated export oriented sectors, and reducing import duties on export related raw material.
The minister hoped that due to measures introduced by the government, a large number of small and medium factories would start their functions within few months thus increasing exports and creation of thousands of new jobs.
Furthermore, he added that the government had reduced taxes on LPG gas used for commercial and domestic purposes from 30 per cent to 10 percent which would help decline of Rs 200 per cylinder.
Regarding relief to agriculture sector, the minister said “we have already announced subsidy of over Rs 6 billion on urea fertilizer for the farmers and would announce further relief measures for them in near future”.
To a question, the minister informed that tax slabs for income tax of salaried with income of up to
Rs 2.4 million per year or Rs 200,000 per month would remain the same, but income tax for salaried class with income of over Rs 2.4 million per year would be increased to 25 percent while for non salaried class the tax rate would be 29 percent.
Replying to another query, the minister said that Federal Excise Duty (FED) on vehicles with range of 1800 cc and above would be increased from 10 percent to 20 percent.
He informed that the government had also initiated work on reforms in the economic sector, and within few weeks the reforms would be finalized.
Meanwhile speaking on the occasion, Minister of State for revenue, Hammad Azhar said that total revenue impact of the new taxation measures would be around Rs 178 billion while the government had also proposed a number of relief so the net impact of revenue would be Rs 120 billion.
He said out of these measures, worth Rs 92 billion were those which were related to enforcement measures including avoiding smuggling, stopping illegal businesses, etc.
Giving details about the new tariffs, the minister of state said that Regulatory Duty on 312 tariff lines of luxury items had been proposed while RD on other 295 tariff lines had also been proposed and RD on import of some export related items has also been proposed to be reduced.
To a question, Hamad Azhar said due to proposed extra duty on cigarettes, the government would get extra Rs 40 billion while price of one packet of cigarette would increase by Rs 7 to10.
He said in order to stop smuggling and illicit production of tobacco products, the government would use the latest technology and would ensure crackdown against those involved in the illegal activities.
Hamad informed that the government had also to revise down the revenue target for year 2018-19 to Rs 4390 which was around Rs 250 billion lower as compared to the actual target due to wrong and over estimation by the previous government.