ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail said worsening government administration in the past had caused huge damage to the national economy and drifted it to the verge of collapse, compelling the coalition government to present a tough budget.
Addressing the post-budget press conference, he said if that maladministration were not addressed timely, it would cause further devastation and that was why the incumbent government had to present such a budget to address those issues.
Miftah said there was a need to correct the country administratively, otherwise, its economy would not be run. “We have to go to other countries for loans, packages and deposits. Pakistan is a proud country, a country of proud people, a nuclear power country, and we will have to fix our economy,” he said. “We should not incur such expenditures that we cannot afford.”
The minister said the budget was presented at a difficult time when the country was passing through very hard times. “At least for the last 30 years…. I have never seen such difficult times where on one side Pakistan is faced with an internationally challenging environment and on the other, the government administration has worsened,” the minister remarked.
Unfortunately, nothing was done by the previous regime to correct the economy, he added. Citing huge losses in the power and gas sectors, the minister said during the past year, around Rs 3,400 billion losses were recorded in the two sectors owing to subsidies and defaults.
The minister said subsidies of more than Rs 1,100 billion were given in the power sector, whereas the circular debt reached Rs 500 billion, taking the total losses of the sector to Rs 1,600 billion. The country had no capacity to bear those huge losses, which, if not addressed, would damage the economy, he added.
The minister said the previous government had caused huge damages to the economy, however, Prime Minister Shehbaz Sharif took difficult decisions and would continue to take more, if required, to put the country back on track.
The government had no other options but to take difficult decisions and the budget reflected that, he reiterated. Miftah said during the current fiscal year, there was almost Rs 4,598 billion deficit. Four big deficits in the country’s history were witnessed during the Pakistan Tehreek-i-Insaf government.
He said owing to the huge debts taken by the previous regime, the current government set aside Rs 3,950 billion for debt servicing, which was equal to two defence budgets of the country.
The minister enumerated that the total revenue target had been set at Rs 7,004 billion and if non-revenue resources were added it would take the total revenue to Rs 9,000. Out of it, an amount of Rs 4,000 billion would be the share of provinces, hence the net collection with the federal government would be around Rs 5,000 billion.
He said if Rs 4,000 billion were spent on debt servicing, then the amount remaining with the federal government would be mere Rs 1,000 billion to manage its all affairs. If other liabilities were also counted, then the country would actually start the new fiscal year with minus Rs 600 billion budget.
Finance Minister Miftah Ismail said the government had increased BISP’s share by 40% or Rs 100 billion. He said Prime Minister Shehbaz had recently talked to the Indonesian president to lift the ban on the import of palm oil, as it caused steep hike in its price to $1700 per ton in the international market.
The government, he said, had also proposed a package of Rs 20 billion for the promotion of seed oils, aiming to increase their production that would help reduce the external dependency for producing cooking oil.
The minister said in the budget 2022-23, the government proposed one percent tax on the properties held abroad by the local Pakistanis.
With respect to tax measures on personal income, he said the government decided to provide relief to the small and medium income salaried persons as taxes were being reduced on those drawing monthly salary up to Rs 200,000 per month, however, taxes were being increased on those getting monthly salary of over Rs 1 million.
He said the government had also decided to bring 2.5 million shopkeepers into the tax net, who would be charged the fixed tax ranging from Rs 3000 to Rs 10,000, which would be collected along with the utility bills.
Regarding to the measures to reduce inflation, the minister maintained that the government’s first and foremost target was fiscal consolidation to save the country financially.
Miftah Ismail gave an open offer to all litigant businessmen to withdraw their cases as the government was ready for out-of-court settlements under its ease-of-doing-business measures.
He said the government had set a target to bring 2.5 million shopkeepers in the tax net, who would be charged with fixed tax of Rs 3,000 to Rs 10,000.
The minister said as the agriculture sector development was on top of the government’s agenda, it decided to withdraw duties and taxes on different agriculture implements, including seeds and agro-machinery.
The government also allocated Rs 21 billion in the federal budget 2022-23 to increase crops yield, besides uplifting the livestock sector, he added.
