ISLAMBAD: The National Assembly Wednesday approved the Financial Bill 2011 for the upcoming year worth Rs. 2.7 trillion, with majority vote and rejecting amendments moved by the opposition.Finance Minister, Dr.Abdul Hafeez Shaikh moved the bill in the House to give effect to the financial proposals of the federal government for the next fiscal year starting from July 1, 2011 and to amend certain laws in the bill.
The House rejected amendments of opposition with majority vote and approved those moved by the Finance Minister to amend the Finance bill 2011.Hafeez Shaikh said that the upper house of the parliament had proposed 66 amendments in the bill, out of which 20s were incorporated that reflected government’s intention that it was taking seriously consideration to the suggestion provided to it.Responding to various oppositions with regard to sales tax, the federal minister said that the government intends to reduce the overall sales tax rates to 15 percent. It had reduced the rates to 17 percent last year and from 17 it was now reduced to 16 percent.
On the issue of income tax exemption, the federal minister said that keeping in view the inflationary trends, the government had enhanced the income exemption from Rs.300,000 to Rs.350,000.He said that the government has to strike a balance while taking such decision.Minster for Finance Dr. Abdul Hafeez Shaikh while responding to various oppositions on the federal budget 2011-12 said that 700,000 people would be included in the direct tax net to broaden the tax base.He said that it was the ultimate objective and desire of the government to provide relief to the people.It is pertinent to mention her that the federal budget approved by national assembly envisages increase in the salaries and pensions, reduction in sales tax to 16 percent, enhancement in income tax exemption form Rs.300,000 to Rs. 350,000,The main focus of the federal budget 2011-12 is to control inflation and provide relief to the masses as government has taken so many measures to achieve this goal.
No new taxes have been implemented in the budget rather so many existing taxes have been abolished while the government has implement only two types of taxes including Income Tax and Sales Tax.The Regulatory Duty on 392 out of 397 items have been abolished, special excise duty has been completely withdrawn, the Federal Excise Duty has been removed on 17 items out of 57 items while customs duty on all pharmaceuticals has been eliminated to help bring down inflation and provide relief to common people.The government has allocated Rs.730 billion in Public Sector Development Programme for upcoming year that would help stir economic activities and create jobs.The budget 2011-12 envisages control the budget deficit of 4 per cent of GDP besides controlling inflation.
Gross federal revenues (tax and non-tax) are projected at Rs. 2732 billion where as FBR collection is projected at Rs. 1952 billion (FBR tax to GDP ratio of 9.3%).The government has increase allocations for the Benazir Income Support Programme from Rs.35 billion last year to Rs.50 billion for the upcoming year,which could be further enhanced to Rs.65 billion if additional resources are available.Allocation of Rs. 33.2 billion, or 12% of the total PSDP has been allocated for water sector projects while an allocation of Rs.32.5 billion is planned for power generation, transmission, distribution and conservation.Earlier, Zahid Hamid was of the view that Senate was given 14 days to discuss the bill so the national assembly should have also been given appropriate time to discuss it.He that the government proposed reduction of General Sales Tax (GST) from 17 per cent to 16 per cent and suggested that it should be brought down to 10 per cent.
By reducing GST to 10 per cent would not help only relief to the masses from inflation but also open way for investment.He said that the government collected Rs.53 billion taxes through promulgation of ordinances which was a violation of the constitution as no tax could be imposed without the approval of national assembly.He said that the government has not yet presented eight ordinances promulgated in last years in the House which was a violation of article 89 of the constitution.Chaudhry Saood Masood suggested that imposing taxes on agricultural equipments would multiply woes of farmers. Tax limit should also be raised to Rs.500,000, he added.
Ahsan Iqbal said that a parliamentary committee should be constituted,having six members each from treasury and opposition benches, to appoint Chief Executives of top monuments of all state enterprises running in deficit.He said that banks were making hefty earnings and they should be bound to allocate five per cent of their profits for Qarza Hasna. The Qarza Hasna should be used for provision of interest free loans to students who want to acquire higher education inside the country or abroad, he added.He said that agreements relating to getting foreign loans should also be rectified from the parliament.Baligul Rehman said that the government should broaden tax base and reduce the tax rates. – APP