Economy’s digitisation is priority, FM's post-budget presser

Islamabad: The Finance Minister Senator Muhammad Aurangzeb Thursday said that digitisation of the economy is the government's priority.

Finance Minister stated in the post-budget press conference that we have to increase the tax scope. 10 percent tax to GDP ratio is unsustainable. The tax to GDP should be taken to 13 percent for which various institutions have to be improved.

Muhammad Aurangzeb added that the undocumented economy is being digitized. It is true that compliance and enforcement of taxes has not been done, end-to-end digitization is being done. The digitization of the economy is our priority, as it will control corruption and boost transparency.

He further said that the innovation of non-filers is unlikely to happen in any other country. The tax rates have been increased for non-filers. The business tax transactions are being increased for non-filers with the aim of bringing them into the tax net. Higher taxes will be imposed on higher income earners. No one should object that the maximum tax on the salaried class is 35 percent.

It is pertinent to note that Federal Finance Minister Senator Muhammad Aurangzeb presented a budget of Rs188.87 trillion yesterday.

Muhammad Aurangzeb announced that tax on retailers and wholesalers will be applicable from July 1. He said the Federal Board of Revenue (FBR) has so far registered 31,000 retailers and the process of registration will continue.

The federal minister said that end to end digitization in FBR is aimed at minimizing human intervention and improving transparency and client service.

He stated that nobody should have any objection on progressive income tax as the affluent class needs to pay more taxes.

The Finance Minister added that tax has been enhanced on business transactions of the non-filers. This is the first step towards doing away with non-filers in the country.

Replying to a question, the Finance Minister stated record allocations have been made for the IT sector to facilitate IT exports and youth in their startups.

Regarding the Small and Medium Enterprises, he said banks are back to finance SME's, IT and agriculture sectors.

Answering another question, Aurangzeb said 81 percent of Public Sector Development Programme (PSDP) spending has been reserved for ongoing projects, while rest of the amount will go for new projects.

The Finance Minister said all the stakeholders including the allied parties are being taken on board on the privatisation process. He added that transactions regarding the privatisation of Pakistan International Airlines (PIA) and outsourcing of Islamabad Airport will be completed by August, followed by Lahore and Karachi airports.

Regarding relief measures, Minister of State for Finance Ali Pervaiz Malik said significant allocations have been made in this respect under the Benazir Income Support Programme (BISP). Similarly, the largest chunk of subsidies will go to the power sector to facilitate electricity consumers, including the protected customers using up to 200 units.

The Minister of State further said an additional amount has been reserved for the Utility Stores Corporation to provide essential kitchen items to deserving people at subsidised rates.

The Minister of State said there is no tax on the employees earning up to Rs50,000.