As soon as the name of the budget comes up, where the hopes of government employees of an increment and other benefits rise, the fear of new taxes increases among citizens.
Finance Minister Shaukat Tarin earlier this year in June presented the budget for the fiscal year 2021-2022 of Rs8.5 trillion while the budget volume for the financial year 21-2020 was Rs. 7 trillion.
The federal budget announced rebates and incentives for almost all industries and said that new businesses would be brought into the tax net. Announcing the incentives for the automobile sector, the financial adviser said, “We have reduced the tax rate on small vehicles.”
Products and development initiatives
In the budget for the fiscal year 2021-22, the federal government has focused on increasing tax revenues to reduce circular debt. It was decided to give special discounts to New Pakistan Housing Scheme and Medium Enterprises and Housing Sectors and it was also decided that special attention would be given to increase remittances through Roshan Digital Account.
The Federal Public Development Budget Program has been increased from Rs. 630 billion to Rs. 900 billion which is 40% more than the previous financial year. Machinery and raw materials were declared tax-exempt. A special technology zone will be set up to promote the IT industry. Rs 91 billion has been allocated for the construction of water reservoirs while the pensions of salaried and pensioners have been increased by 10%.
Relief for the people
The budget for the current financial year has reduced the regulatory duty on imports of paste, butter, and powdered milk. Locally manufactured vehicles of 850 cc or less will be exempted from value-added tax while large The tax rate on vehicles has been reduced from 17% to 12.5%.
The federal excise duty on telecommunications has been reduced from 17% to 16%, while the holding tax (WHT) on telecommunication services has also been reduced to 3%. In order to include them among the taxpayers, electricity bill holding tax is being increased to Rs. 25000 withholding tax on cash withdrawals and non-cash banking transactions will be abolished.
Finance adviser Shaukat Tarin has announced to bring money budget till the first week of December but he says that no tax is being imposed in money budget. People have somehow got an exemption on taxes of three hundred and fifty billion rupees, they are abolishing it.
tarin said that there are about 2 million people who pay taxes while data of 15 million people have been collected. No new tax will be imposed directly on the people which is not likely to increase inflation, he said.