Govt to retain tax exemptions on laptops, solar panels, bread, milk: Tarin

Govt to retain tax exemptions on laptops, solar panels, bread, milk: Tarin

ISLAMABAD, Jan 13 (APP): Minister for Finance, Revenue and Economic Affairs Shaukat Tarin on Thursday said the government had decided not to withdraw exemptions of taxes on basic items such as milk, bread, laptop and solar panels.
Winding up the debate on the Finance Supplementary Bill, 2021 in the National Assembly, the finance minister said the Bill was aimed at documenting the country’s economy.
He said the country had Rs 20 trillion worth of retail market out of which only Rs 3.5 trillion sales were documented which was alarming.
“We will have to document our economy to achieve our tax to GDP ratio target of 18 to 20% as until it is not achieved, we will not be able to maintain our fiscal balance,” he added.
The minister said how the opposition could insist that the country’s sovereignty was being compromised while being in the International Monetary Fund (IMF) programme, when it had entered into the IMF programme 13 times.
Shaukat Tarin said the country’s exports, Large Scale Manufacturing sector (LSM) and Auto sectors were growing rapidly.
He said the lack of import-export gap, exchange rate gap and productivity gap result in lack of sustainability, but once these entire shortcomings are overcome, the country’s economy would start hitting new highs.
 He said when this government took over the charge, the country’s total foreign exchange reserves were only $12 billion and it had to pay loans worth $32 billion.
There was no escape from the IMF at that time. When we went to the IMF, our growth slowed down and afterwards another worst situation came amid the pandemic of COVID-19.
But due to timely actions taken by the government under the leadership of Prime Minister Imran Khan, the country came out of a deep economic crisis.
“Our GDP growth rate last year was recorded at 4% and it will further increase by over 5% in the current fiscal year,” he added.
Shaukat Tarin highlighted that the country’s revenues were growing at the rate of 35% which had never witnessed such a fast growth in any year of the history of Pakistan.
He said the country’s exports would record over $31 billion and remittances too would surpass the $31 billion mark by end of current fiscal year.
He admitted that inflation was a big challenge for the government but said that it was a global issue.
He said he had called for inclusive and sustainable growth and would fulfill his pledge as the inclusive growth was being ensured. He said Sehat Sahoolat Card, Kamyab Pakistan Programme under which over Rs 1.4 trillion would be spent on common man during next 3,4 years were few of the examples of inclusive growth.
When the international prices would subside, Current Account Deficit (CAD) would come down and the growth would pick up the pace and Pakistan would be developing fast then what would the opposition do, he questioned.
The minister said the government was passing through a painful process of making fundamental changes in the already dilapidated economy.
“I urge the opposition to support us in this process instead of creating hurdles, because everybody should keep in mind that the government is not going to step back from putting the country on the path of sustainable development,” he added.
With respect to additional tax on the pharma sector, the minister added that the new tax was aimed at documenting the undocumented pharma companies and these taxes would be refundable or adjustable and that these refundable taxes would also help reducing the prices of medicines.
He dispelled the impression that a new wave of inflation would come in the country after passing of the finance supplementary bill 2021, as what he said the new taxes were very negligible and they would not have much impact on the prices of basic items.
He said the Sensitive Price Index (SPI) was going negative for the last several weeks adding that the SPI rate had been on the higher side only due to high petrol, and cooking oil prices which were being imported. However, he said the prices of vegetables, fruits, eggs, poultry and other eatables had come down significantly.
Shaukat Tarin said during the current government, the foreign loan of the country was increasing at an average rate of $3 billion per year while net increase in volume of foreign loan per year during previous government was over $4.5 billion.
He said GDP in the previous government rose due to the fact the rupee value was kept undervalued.
Meanwhile, minister for planning, development and Special Initiatives Asad Umar said in the National Assembly that for the last two and half years, the government had not taken any loan from the Central Bank, therefore the passage of State Bank of Pakistan Bill, 2021 would not affect the government.
He said the SBP Bill would neither create any problem to the country nor to the government.