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Easy business loans will be provided to four to six million families

Easy business loans will be provided to four to six million families
June 11, 2021

ISLAMABAD (92 News) - Finance Minister Shaukat Tarin has said that the easy business loans will be provided to four to six million families

Presenting the Federal Budget 2021-2022, the finance minister said that never in our economic history, were poor people able to realise their dreams, adding that PM Imran Khan wanted to uplift the poor.

The minister said the government will provide Rs500,000 loans to the poor, and Rs150,000 loans to farmers, adding that under the low-cost housing scheme, the government will give Rs2 million loans to them so that they are able to build their houses. "They will be given Sehat cards and technical training," he maintained.

REMITTANCES

Tarin said remittances had increased in Pakistan to record levels, adding that these are expected to rise to $29 billion by the end of this month. “This is proof of the love that overseas Pakistanis harbour for Prime Minister Imran Khan,” he said.

GROWTH

“The Budget 2020-21 seeks inclusive and sustainable growth. We hope to increase our growth rate to 4.8 per cent.” “We want to make sure of a growth rate of 6% to 7% in the next two to three years,” Pakistani Finance Minister Shaukat Tarin said as he addressed the budget session in parliament.

Tarin said the economy had grown and as a result, more people had secured jobs over the years. The finance minister said that despite the coronavirus pandemic, the per capita income of the common man had increased by 15%.

EMPLOYEES

The Finance Minister announced the grant of ten percent adhoc relief allowance for all the federal government employees and ten percent increase in pensions with effect from next month. The orderly allowance has been enhanced from 14,000 rupees to 17,500. The integrated allowance for employees in basic pay scale one to five has been doubled from 450 rupees to 900 rupees.

The minister said the minimum wage is proposed to be increased to twenty thousand rupees to mitigate the inflationary pressures on the low income groups.

FOOD/WATER

The finance minister said the government is placing highest priority to uplift the agriculture sector. He said 12 billion rupees are being allocated for various agri-related initiatives. These include one billion rupees for locust emergency and food security projects; two billion rupees for enhancing productivity of rice, wheat, cotton, sugarcane and pulses; one billion rupees for enhancing oil cultivation on commercial scale and three billion rupees for improvement of water courses.

Shaukat Tarin said a total of 91 billion rupees are proposed in the budget for ensuring water security, excluding hydel energy generation projects. Fifty-seven billion are being allocated for Dasu Hydropower project, 23 billion rupees for Diamer-Bhasha, six billion rupees for Mohmand Dam and 14 billion rupees for Neelum-Jhelum hydropower project.

ENERGY

The minister said 118 billion rupees are being allocated in the budget to ensure energy security. He said 7.5 billion rupees are being earmarked for 1000 KVs Islamabad West and Lahore North transmission lines; 8.5 billion rupees for evacuation of 2160 MW of power from Dasu; 5.5 billion rupees for evacuation of power from Suki Kinari, Kohala, Mahal Hydropower project, and 12 billion rupees for secondary transmission lines in Hyderabad and Sukkur. He said we will invest in completing the 1200 MW of coal-fired power projects in Jamshoro for which 22 billion rupees will be allocated. 16.5 billion rupees are being proposed for K-I and K-II in Karachi and fifth extension of Tarbela Hydropower project.

REGIONAL DISPARITIES

Referring to the special development packages announced for different regions, the Finance Minister said 20 billion rupees have been earmarked for accelerated development plan for Southern Balochistan, 25.4 billion rupees for Karachi Transformation Plan, 40 billion rupees for socio-economic development of Gilgit-Baltistan and 19.5 billion rupees for development of different districts of Sindh. He said the government attaches special attention to the development of tribal districts and has increased allocation for them to 54 billion rupees. This includes 30 billion rupees for 10 yea development plan.

SOCIAL SECTOR

Tarin said the government has made social sector improvement the key priority in areas like health, education, sustainable development goals, climate change for which 118 billion rupees have been proposed in the PSDP. This includes thirty billion rupees for health, forty four billion rupees for higher education and sixty eight billion rupees for achievement of SDGs.

VACCINATION

Shaukat Tarin said 1.1 billion dollars will be spent on importing COVID-19 vaccine besides providing funding for local production of anti Covid vaccine. He said it is estimated that over one hundred million people will be vaccinated by June next year.

One hundred billion rupees have been proposed to meet exigencies related to COVID-19.

INITIATIVES

The finance minister said ten billion rupees have been made for Kamyab Pakistan Program. He said an anti-rape fund is being established with an amount of one hundred million rupees.

To undertake a new population census next year, an amount of five billion rupees as federal share has been proposed while a similar amount will be allocated to hold local government elections.

He said the federal government will extend financial support of twenty billion rupees to PIA and 16 billion rupees to Pakistan Steel Mills.

TAX INCENTIVES

Tarin announced several tax incentives and exemptions for various sectors to promote business activities and provide relief to the general public.

He said it is proposed that small cars up to 850 CC capacity may be exempted from levy of federal excise duty besides reducing sales tax rate from 17 percent to 12.5 percent and withdrawing value added tax.

He said the government is encouraging manufacturing and use of electric vehicles. For this purpose, various tax exemptions and concessions are being proposed, which include tax exemption on import of CKD kits for local manufacturing of electric vehicles, reduction in sales tax rate on locally manufactured electric vehicles from 17 percent to one percent, withdrawal of value addition tax on import of electric vehicles and CKD kits. Federal Excise Duty is being withdrawn on four wheelers electric vehicles.

He said zero rating on export on IT and IT-enabled services is being proposed by amending ICT (Tax and Services) Ordinance 2001. He said federal excise duty is being withdrawn on industries related to cooking oil, ghee and steel products in erstwhile FATA and PATA. FDE is also being withdrawn on juices, which was earlier imposed through Finance Act 2019.

He said a cottage industry having annual turnover of over ten million rupees will no longer be required to register for sales tax. To facilitate the registered persons and enhancing ease of doing business, we are allowing constructive payment for adjusting payable and receivable under Section 73 of Sales Tax law.

He said removal of restriction on input tax allowance under sales tax law has been a major demand from business community. However, considering the importance of minimum value addition on VAT model, it is proposed to eliminate this restriction on highly regulated corporate sector that is public limited companies listed on Pakistan Stock Exchange. This would be a major breakthrough for major corporatization of economy and facilitation of regulated corporate sector.

Shaukat Tarin said it is proposed to grant exemption on import of high quality art and printing paper for the purpose of printing and publication of Holy Quran.

Shaukat Tarin said special technology zones are being established throughout the country and to encourage investment in these zones tax exemption on import of plant, machinery, equipment and raw material is being proposed.

He said the government is encouraging storage of grain and agriculture activity and improve shelve lives of commodities in rural areas. He said it is, therefore, being proposed to grant exemption on locally produced silos. Rate of FED on telecommunication is proposed to be reduced from 17 to 16 percent. He said we are proposing withdrawal of FED on merchant discount rate charged on POS by banks so that businesses are encouraged to carry out transactions through POS machines.

The minister said the government is introducing a number of tax measures as well as concessions for promotion of digital economy. He said we are proposing a new prize scheme for the customers making purchases from tier-1 retailors integrated with FBR. The monthly prizes of 250 million rupees will be disbursed to customers holding system generated invoices issued by tier-1 retailors through computer balloting.

Shaukat Tarin tax exemption is being given on import of auto disable syringes and their raw materials and exemption on oxygen cylinders to mitigate adverse effects of COVID-19.