ISLAMABAD: In what could bring relief to taxpayers, Federal Minister for Planning and Development Ahsan Iqbal on Wednesday said the government was preparing to reduce tax rates for the salaried and business classes in the upcoming federal budget.
Speaking to the media in Islamabad, the minister said the government was making “full efforts” to ease the tax burden in the budget for the next fiscal year and address public concerns over rising costs of living.
“Prime Minister Shehbaz Sharif is fully aware that the tax burden on the salaried class is high,” Iqbal said, adding that the premier was engaging with the International Monetary Fund (IMF) to secure room for “appropriate” cuts in tax rates.
The minister conceded that high tax rates had led to a contraction in economic activity across the country. “Creating a conducive business environment will be the top priority in the budget,” he noted.
Focus on exports, IT and agriculture
Outlining budget priorities, Iqbal said special importance was being given to the export sector. He said the government would work to remove bottlenecks faced by exporters and extend “maximum concessions” to boost foreign exchange earnings.
He added that specific measures would be introduced to promote IT exports and accelerate the adoption of modern technology in the agriculture sector.
Development budget constraints
Iqbal also flagged challenges on the development front, saying ministries had demanded Rs3,000 billion for ongoing projects. However, the development budget for the next fiscal year was expected to be around Rs1,125bn.
“Due to a severe shortage of funds, we will have to re-determine priorities in the development budget,” he said.
He further noted that the IMF had asked that provincial projects be financed through provincial development budgets rather than the federal Public Sector Development Programme (PSDP).
‘Relief and stability’
The planning minister expressed hope that the proposed measures would not only provide relief to the common man but also “pave the way for stability and development in the country’s economy.”
