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‘Taxation is not equitable and requires rationalisation.’
The adviser said it was unfortunate that industry’s contribution to tax
collection was 60 per cent, but there were no taxes on agriculture, services and
real estate sectors. ‘Tax-to-GDP ratio will be increased from nine per cent to
15 to 20 per cent.’
Speaking at a pre-budget seminar organised by a local newspaper here on
Saturday, Mr Tarin said there was no proposal to increase the general sales tax,
but interest rate was likely to be lowered to bring the existing 17 per cent
inflation down to a single digit.
Special economic zones, he said, would be developed.
The government would allocate funds for infrastructure development and building
new dams, wind energy projects and increase investment in dairy industry.
He said growth had been adversely affected because of the reduction in Public
Sector Development Programme (PSDP) allocation.
Highlighting the government’s poverty alleviation strategy, he said it would
continue providing subsistence to the poor and enable them to earn a living
through skill development.
The poor would be provided with temporary employment at the union council level
and allocation for health and education would be increased from the existing two
per cent.
He said Pakistani textile industry was not only importing cotton but earning
less than $1 billion while India and China were earning $2 billion and $4
billion, respectively.
Incentives would be provided to textile industry, pharmaceutical, automobile and
leather sectors for increasing income through value-addition.
He said the government had paid back Rs200 million taken from the State Bank and
decided to meet further financial requirements from the market instead.
He said the government would form think-tanks to strengthen the institutions. It
was trying to retain the competitiveness of rupee in the exchange market without
disadvantage to the industry.
Answering a question raised by the adviser of the All Pakistan Flour Mills
Association, Bilal Sufi, Mr Tarin said the government was considering exporting
wheat on a limited scale. ‘However, the government will allow export only after
assessment of stocks and retaining strategic reserves.’
Former finance adviser Dr Salman Shah said the country had to borrow from the
IMF because of financial mismanagement.
Former federal commerce minister Humayun Akhtar Khan said exports, instead of
growing at a rate of 25 per cent, were going down.
Chairman of the All Pakistan Textile Mills Association Tariq Mahmood stressed
the need for ensuring uninterrupted power supply to the textile industry,
rationalisation of energy tariff and cut in the mark-up rate, and called for
facilitating polyester import.
Former LCCI chief Tariq Sayeed Saigol said government’s romance with services
sector had landed the economy in trouble. He said that the government should tax
the Afghan transit trade to discourage its misuse. |
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