Daily Times

ISLAMABAD: The government on Friday presented the budget for 2016-17 with an outlay of Rs 4.394 trillion, imposing taxes on sale of property, screening of foreign TV dramas, cement, import of eggs, chicken, frozen fish, dry milk and almonds.

Federal Minister for Finance Ishaq Dar presented the budget in both Houses of the parliament. He announced 10 percent capital gains tax on the sale of property within five years and fixed the corporate tax ratio at 31 percent. According to the budget, taxes on the screening of foreign TV dramas in Pakistan and the Super Tax will stay for another year.

Customs duty on import of eggs and chicken rose from 6 percent to 11 percent. Customs duty on frozen fish rose to 20 percent and on dry milk 45 percent. Duty on import of almonds rose from 10 percent to 20 percent. However, 10 percent customs duty on car tyres has been abolished.

Announcing relief measures in the Income Tax regime, Dar said that corporate tax had been reduced to 31 percent for 2016-17 and it would be reduced to 30 percent in the fiscal year 2017-18 to encourage corporatisation. The minister said that a current deductible allowance of up to Rs 1 million on payment of profit on debt for construction of a new house or acquisition of a house had been proposed to be increased to Rs 2 million to promote activity in the housing sector.

It is proposed that individuals having a taxable income less than Rs 1 million should be given tax relief equal to 5 percent of school fee up to Rs 60,000 per child per annum, he said.

The finance minister said the final tax on the commission income of life insurance agents might be reduced from 1 percent to 0.8 percent for filers on commission receipts up to Rs 0.5 million. The minister said that reduction in the fiscal deficit, increase in the tax revenue, continued focus on energy, promotion of exports, poverty and unemployment, Benazir Income Support Programme (BISP) and development and promotion of the IT sector were main elements of government’s budget strategy. He said that an increase in the GDP growth, investment to GDP ratio, decrease in inflation, cut in fiscal deficit, increase in tax to GDP ratio and growth of foreign exchange reserves to $ 30 billion were main features of the framework.

Referring to the development plan, the finance minister said the government would focus on water, power, highways, railways and human development, which contributed the most to the economic development. He said that a special development plan worth Rs 100 billion had been prepared for the temporarily displaced persons and better national security.

About the China-Pakistan Economic Corridor (CPEC), the minister said that $46 billion investment would result in improvement in the economies of the four provinces and special areas of the country. He said that keeping in view the significance of the Gwadar Port the government was taking the development of this area very seriously.

Dar said that a technology upgrade fund, duty-free import of machinery, withdrawal of customs duty on manmade fibre and plant breeders rights act would enhance export competitiveness of the textile sector. He said that agriculture was the backbone of the economy and keeping in view difficulties faced by this sector, special steps had been taken such as concession of taxes and duties, reduction in prices of fertiliser, increase in the limit of the agriculture credit, decrease in the cost of credit, credit guarantee scheme, concession in power tariff for agriculture tube-wells, concession in customs duty for dairy, livestock and poultry sectors, concessions in customs duty on fish farming, relief on cool chain machinery, exemption of sales tax on pesticides and exemption to silos.

Dar said that several measures had been proposed in the budget to save energy and promote alternative sources of energy.

The minister said that minimum wages for labourers had been increased from Rs 13,000 to Rs 14,000 per month. He said that gross revenue receipts for 2016-17 were estimated to stay at Rs 4.915 trillion compared to the revised figures of Rs 4.332 trillion for 2015-16.

The total expenditure for 2016-17 is budgeted at Rs 4.395 trillion compared to the revised estimates of Rs 4.095 trillion for 2015-16, showing an increase of 7.3 percent. He said the current expenditure was estimated to be Rs 3.400 trillion for 2016-17 against a revised estimate of Rs3.282 trillion for 2015-16, showing an increase of 3.6 percent.