Finance Minister holds post-budget press conference

Finance Minister Muhammad Aurangzeb, accompanied by Information Minister Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani, Finance Secretary Imdadullah Bosal, FBR Chairman Rashid Mahmood Langrial and Tax Policy Bureau Chief Najeeb Memon, addressed a post-Budget press conference on Saturday.

The Finance Minister said that last year, during discussions on economic stability, the government committed to moving from stability to growth.

He said this budget delivers on that commitment, with steps taken to move from economic stability to economic growth.

Aurangzeb said steps have been taken in the budget to promote exports, including removal of advance tax and proposed removal of super tax for all exporters.

A subsidy of Rs70 to Rs71 billion has been provided to ensure a conducive environment for exporters, who will also have access to financing at 4.5 per cent.

He added that duties on the import of raw materials have been reduced to bring down production costs.

“We have made significant progress and you have read and listened to the budget speech,” Aurangzeb said, adding that the main themes of the budget are export-led growth and enabling factors.

“We have done our best to integrate all these areas in a favorable environment,” he said.
In terms of taxation, the withholding tax has been abolished, noted the Minister of Finance, adding that in terms of super-tax, “we have decreased from 10 to 8%, which is again a very significant direction.”

He noted that when he spoke to Prime Minister Shehbaz Sharif and the Cabinet yesterday, they specifically requested that the super tax be abolished for all exporters.
Stating that “it is not only a question of taxation, it is also a question of financing”, the Minister of Finance said: “We are taking this refinancing plan to a different level.”

“For this, we have provided a subsidy of Rs71 billion during this budget so that this financing remains available to Pakistan’s exporters at 4.5%,” he said. He continued: “In terms of policy rate and inflation, it is 4.5%.”

Expressing gratitude to the State Bank Governor and those who spoke to the banks, Aurangzeb said the fact that this financing is available at 4.5%, which he said is in trillions is a very important feature.

On reducing the costs of intermediate goods and raw materials, the Finance Minister said the mentioned financing mechanisms are “the way we can increase export competitiveness.”

He added that “we remain focused on goods, which is very important, and on how to reduce the goods trade deficit.”

He also noted that services are becoming increasingly important, especially IT services, adding that overall exports of goods and services will reach $4.5 billion next year.

For this reason, he said that as far as the IT industry and freelancers are concerned, the FDR of 0.25% should be maintained.

“We have made an effort to liberate the lowest segments of the salary class,” Aurangzeb said, from 5% to 1% and from 15% to 13%. “But the reality is that the slabs above and especially the surcharge element are all in front of you,” he added.

“If we were to move this budget in a pro-business, pro-growth, so pro-construction direction, obviously housing construction plays a very important role and the transaction taxes we have reduced, you’ve seen that already,” he said.

On agriculture, he said: “It has increased by 15% per year and it has exceeded 2 trillion, which is the overall agricultural financing. »

The Finance Minister also discussed the Zarkhez-e program, which he said was introduced this fiscal year and is completely digital.

“Most importantly, it is without collateral; for small farmers, there is no question of keeping someone as an individual or mortgaging someone’s house,” he said, adding that the scheme was introduced for small farmers and is moving in the right direction.

He also mentioned the Prime Minister’s agricultural loan, particularly intended for young people, the total amount of which is Rs262 billion. Of this, Rs125 billion has been allocated for agriculture, the finance minister said.

Read: Achakzai questions state policy, Shehbaz promises to respond in National Assembly

He also spoke about Pakistan’s need for value-added machinery, which he said is not manufactured in the country. “We can get it from China or other countries, which will help us really increase the yield,” he said.

“On all these things, customs duties, additional customs duties, regulatory duties have been reduced to zero,” the Finance Minister noted.

Calling agriculture “one of the key principles of growth,” Aurangzeb addressed what he saw as a matter of deepening and broadening.

To elaborate, he said, he referenced “digital surveillance and other things that are happening right now,” saying he particularly mentioned additional revenue being made from it.

Discussing the new model of tax operation, Aurangzeb noted that the government wants to move it towards automation. “We want to move towards AI,” he said, adding: “We reduce human intervention.”

Moving on to the discussion on enlargement, the Finance Minister said that the retailers’ program was mentioned in the budget.

“We made a big effort in this budget, especially what was said that you only talk about economic stability, economic growth, where is it? Aurganzeb said, adding: “This time we have largely used the available budgetary space.”

Although he noted that “there is still a lot to do,” he said: “I repeat, the feedback we have received is that we are moving towards economic growth.”

He added that the budget would play a crucial role in this regard.

The Minister of State for Finance, Bilal Azhar Kayani, stressed that “fundamentally, it is the budget of the wage class, it is the budget of industrialists, it is the budget of exporters, it is the budget of the construction sector”.

Kayani added: “This is the budget of someone who wants to build their own house and cannot afford to do so.”

“It is the other parts of our economy that need resources so that our economy can move forward,” said the minister, stressing that the budget aims to reduce the burden on citizens.

He said the Prime Minister, the Finance Minister and the entire economic team “have always admitted that very few people carry the burden of this tax on their shoulders”.

“The salary class is at the top of the list,” Kayani said, adding that “that is why it has always been said that the government will give relief to the salary class when it gets the chance.”

Kayani also mentioned the reduction of minimum and advance taxes for exporters, “whether it is the elimination of the first six tranches of super-taxes and the reduction of the last tranche of 500 million to 10% or 8%”.

“These were basically the main demands of our exporters and our formal industry,” he said.

He continued: “When we talk about reducing the tax burden, we have not limited this consultation and, therefore, in discussing with our business community, the real issues that came to mind to reduce the tax burden, the key levers identified have been addressed by the government.”

He noted that a week before the budget, Prime Minister Chehbaz held a detailed meeting with all chambers in the country, including the FPCCI. “Be it Lahore, Karachi, Quetta, Peshawar, Faisalabad, Sialkot,” he said, “each of their respective regions which are part of our economy have brought their problems.”

He added that a separate meeting was held with other industry leaders including the Business Council of Pakistan. “As a result of these consultations, we have not only provided relief measures in this budget, but we have also continued to make improvements throughout the year. »

Speaking about taxes that impact the social sector, Kayani mentioned the GST exemption for the pink tax or the GST exemption for contraceptives. “These are also important requirements for us in terms of population control and women’s reproductive health, which have been fulfilled by the government of Prime Minister Shehbaz.”

Kayani then discussed the GST exemption for the shipping industry. “During this war and conflict, we realized the importance of having our own maritime fleet and how strategic it is for you,” he said, emphasizing that this is the reason why this issue was kept in mind.

“Regarding export financing and housing allocation, under the Benazir Income Support Program, your weakest sectors, more than 10 million households have been increased thanks to women,” the minister said.

He added that this is a public budget and because the public supported the Prime Minister in a difficult time, the phase of stabilization and improvement that he had promised has begun. “This will provide employment, trade, exports to all and increase the purchasing power of our brothers and sisters.”

The finance minister on Friday unveiled a federal budget of 18.8 trillion rupees, proposing to significantly roll back punitive taxes imposed on the salaried class and the real estate sector while deepening economic liberalization.

Learn more: 18.8 billion rupees outlay targets growth

The expansionary budget of Rs 18.8 trillion was 20 per cent, or Rs 3.1 trillion, higher than the revised outlay of the outgoing fiscal year, indicating the government’s intention to shift gears from consolidation to spending.

Despite significant contributions from four provinces, the federal government announced a deficit of Rs7,000 billion, higher than that of this financial year and which will be filled by taking out more loans. The government also plans to obtain $23.4 billion in foreign loans, including $2 billion in the form of Euro and Panda bonds.