ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail has promised Pakistan is no longer heading toward default as it has now got back on the path to progress, he was addressing in the National Assembly of Pakistan on Friday.
The premier wrapped up the discussion on budget 2022-23 after the consideration of the recommendations made by the Senate. The finance minister vowed there hasn’t been a more “farmer-friendly budget” in the last 10 years.
The finance minister further added that the outgoing fiscal year 2022-23 will be considered a “bad year” in the country’s history as Pakistan had a huge budget deficit and missed several targets.
“The federal government’s budget deficit this year was Rs53,010 billion rupees while the total deficit was Rs74.04 billion,” he said, adding that such a deficit means that the government has to ask for money from the entire world.
Federal Minister for Finance further said most of the recommendations put forward by lawmakers in the Senate and NA during preceding sittings had been incorporated into the budget.
“One of the long-term goal of this budget is to become self-sufficient in edible oil, wheat, and other commodities,” he said.
Ismail termed funds for farmers in the budget as investments. “If we invest in agriculture, farmers will give us the best returns.”
The minister thanked PML-N and other parties’ leaderships for allowing him to take tough decisions.
He said the “federal government has posted a deficit of 8.95% of the old gross domestic product (GDP)”, adding that this showed the wide gap between the country’s expenditure and resources.
“And then we have to take funds from others,” said Ismail, adding that it was for this very reason that he had to go on multiple foreign trips right after becoming the finance minister in April.
He blasted the previous government for fuel and energy subsidies that it had been given on February 28.
The subsidies, he said, were worth Rs120 billion. He thanked the PML-N partners in the coalition set up for accepting that the government could not bear this expense at a difficult time like this.
“It was a tough decision to end subsidies,” he said, acknowledging the coalition parties for supporting the “tough” decision.
The finance minister said that to curtail the previous four record budget deficits during PTI’s tenure, taxes will be collected from the rich. “The revenue from the rich will help the government achieve its target of budget surplus, which has been committed to the IMF,” he added.
Moreover, to decrease the country’s reliance on other countries for funds, Miftah announced a list of taxes that would be collected from the elite class and large-scale industries. Among the taxes being imposed; 1% additional super tax on individuals or companies earning more than Rs150 million, 2% additional super tax on individuals or companies earning more than Rs200 million, 3% additional super tax on individuals or companies earning more than Rs250 million, 4% additional super tax on individuals or companies earning more than Rs300 million.
“These additional taxes will be only be imposed for a fiscal year 2022-23,” he clarified.
Read also: PTI rejects super tax, says it will intensify economic crisis
Miftah revealed the government had identified 13 sectors that had earned significant profits this year. “We have decided that companies that have an income of more than Rs300 million will be subjected to a super-tax of 10% for a year,” he announced.
Textile, Automobile assembling, Sugar mills, Beverages, Oil and gas, Fertilizer, Cigarettes, Chemicals, LNG terminals, Cement, Steel, Banking, and Airlines are among the sectors to come under the newly imposed super-tax. Moreover, 4% super tax will be applicable to all other sectors.
Just to clarify: the super tax of 4% will be applicable to all sectors. But for the specified 13 sectors, another 6% will be added for a total of 10%. So their tax rates will go from 29% to 39%. This is a one-time tax needed to curtail the previous four record budget deficits.
— Miftah Ismail (@MiftahIsmail) June 24, 2022
Miftah, later in a tweet, also clarified that the super tax of 4% will be applicable to all sectors. But for the specified 13 sectors, another 6% will be added for a total of 10%. So, their tax rates will go from 29% to 39%.
“This is a one-time tax needed to curtail the previous four record budget deficits,” he said.
