ISLAMABAD, Jun 10 (APP): Minister for Finance and Revenue Miftah Ismail on Friday said the coalition government intended to encourage and promote progressive taxation system by bringing the potential persons and wealthy into the tax net rather than burdening the existing tax payers in order to enhance revenue and increase spending on uplifting the social sector.
Presenting the Federal Budget 2022-23 in the National Assembly, the minister said main component of the taxation policy for next fiscal year was to increase reliance on direct taxes, including income tax and capital value-added tax and taxing the non-productive assets.
He said there was lack of suitable investment conditions as the existing taxation system was also not fully supportive for entrepreneurship, rather it discouraged the investment.
The system, he said, facilitated investment in the real estate sector, which was not an encouraging sign for economic growth as it created hurdles in major sectors’ development.
This trend, he added, increased the prices of real estate manifold, rendering the construction of residential units out of the reach of the middle income people.
Miftah said the gains made through non-productive investment was one of the major reasons of rising inflation and social unrest, and the government was determined to streamline the real estate to make it an engine of growth.
He said the government was committed to create a business friendly environment by simplifying the taxation system and bringing structural reforms.
The minister said the government was aware of the hardships being faced by the common man, and that was why it introduced some relief measures particularly for the common man.
For the salaried class, it proposed some tax relief measures, including increasing the tax exemption limit from Rs 0.6 million to Rs 1.2 million, he added. This initiative, he said, would help address the economic problems of fixed income group, besides promoting trade opportunities.