Finance bill aimed at regularizing taxation: official – Journal
KARACHI: Ministry of Finance spokesman Muzzammil Aslam objected to the term “mini-budget” to describe the 2021 (additional) finance bill, saying the legislation aims to correct the tax system in the country. instead of increasing revenue collection.
“The mini-budget is what every government presented each year from 2002 to 2018. They miss collection targets and then revise tax rates through mini-budgets. But we are already ahead of our fundraising target, ”he told a press conference at the Karachi Press Club on Saturday.
Eliminating concerns that the withdrawal of sales tax exemptions amounting to Rs 343 billion will create inflation, Mr. Aslam said. “The rich have long benefited from these exemptions on behalf of ordinary people,” he added.
He repeated all the talking points from Finance Minister Shaukat Tarin’s speech to parliament on December 30. He insisted that no taxes are imposed on stationery, laptops and small bakeries while defending the zero-rated status of packaged milk as only five per percent of the population consumes it.
Says no tax is imposed on stationery, laptops, small bakeries
He said drug prices will actually drop after an adjustable sales tax is imposed. “You can hold us accountable if the prices of drugs don’t come down,” he said. “We tax it only to capture the entire pharmaceutical value chain,” he added.
Regarding the increased sales tax on imported cell phones, he said that only a wealthy person buys a mobile worth Rs 35,000 or more – the rupee equivalent of the $ 200 threshold.
He admitted that edible oil was getting expensive, but added that its imports are in the private sector and depend entirely on international prices. He noted that people in deserving segments of society get it at a 30% discount in 700,000 grocery stores through the Ehsaas program.
Regarding the price of sugar, Mr Aslam said its rate per kilo has fallen to Rs85-90 from the peak of Rs150, although consumers based in Sindh are still getting it at Rs100 due to the mismanagement by the provincial government.
Responding to a question, the spokesperson said that the increase in overall revenue collection was well balanced and should not be attributed solely to import-related taxes. “Income tax collection has increased by 32% from the 25% target,” he said while partly attributing the one-third direct tax hike to the increase in corporate profitability which could reach the mark of 930 billion rupees by 2021.
Regarding the growing import bill, Mr. Aslam said the country imports $ 1 to $ 1.25 billion worth of machinery every month, which will increase exports in the future. “Up to 85% of the recent increase in the import bill is due to the price effect, while 15% is due to the volumetric impact,” he said.
On inflation which peaked at 22 months at 12.3% in December, Mr Aslam listed all the countries where prices for daily items were on the rise. “Personally, I was not in favor of a drop in oil prices two weeks ago. But the Prime Minister wanted us to pass the full benefits of lower fuel prices on the international market to local consumers, ”he said while justifying the latest hike of Rs 4 per liter.
Posted in Dawn, le 2 January 2022