Islamabad: Finance Minister Shaukat Tarin has said that taxes had been abolished to facilitate the investment of Chinese friends in the Special Economic Zones (SEZs) being set up under the China-Pakistan Economic Corridor (CPEC) project.
Speaking at a post-budget news conference here, the Finance Minister said the government expected huge Chinese investments in the CPEC SEZs.n “We have abolished the tax to facilitate the Chinese friends (investment in the CPEC SEZs),” he said.
Minister for Economic Affairs Khusro Bakhtiyar and Adviser to Prime Minister on Commerce and Trade Abdul Razak Dawood and others were also present at the event.
On Friday, Pakistan had exempted CPEC’s enterprises of the SEZs from the minimum tax for the financial year of 2021-22 – starting on July 1, and onwards. Presenting the national budget in the parliament, Finance Minister Shaukat Tarin said the SEZs were a key project of the mega CPEC project.
The Pakistan Tehrik-e-Insaf (PTI)-led government earlier unveiled Rs 8.4 trillion federal budget for the fiscal year 2021-22. Finance Minister Shaukat Tarin claimed the government steered the economy out of crisis and put it on the growth trajectory.
Tarin said the government had set its priorities of implementing the CPEC projects, besides constructing and operationalizing the SEZs under CPEC during the upcoming fiscal year. He said the PTI-led government has showed its commitment to speed up the projects under CPEC. “So far 17 mega projects have been completed at a cost of US$13 billion while 21 more projects of US $21 billion are in the pipeline,” he said. Tarin added that 26 projects valuing US $28 billion of strategic nature were also in planning stage.
In the budget 2021-22, the government has prioritize six projects under CPEC include completion of Karachi-Lahore Motorway, the 120 kilometers Havelian-Thahkot road phase-I, the second phase of Karakoram highway, Zhob-Kuchlak road and expansion and construction of Chitral-Boni-Mustoj-Shundor road.
Finance Minister Shaukat Tarin told the post-budget news conference that government gave great importance to the CPEC and the SEZs.
He said the taxes on the information technology (IT) have also been rationalised in order to exploit its full potential, adding the government wanted to substantially enhance this sector’s exports in the years to come.
Tarin said that duties have been abolished on almost all the raw materials to strengthen the local industries and reduce imports.
The finance minister was confident that the prices of cars up to 850cc will come down following the tax relief given to the automobile sector. He said the incentives given to the small and medium enterprises (SMEs) will also help achieve higher growth in the industry.
The Finance Minister said that the budget 2021-22 focuses on uplift of the poor and sustainable economic growth through incentives for various sectors, including agriculture, industry and housing.
Tarin said that the main emphasis of the budget was to protect the vulnerable segments of the society. The Finance Minister said that incentives have been given to uplift both the agriculture and industries, which will increase employability. He said the incentives in the industries are not only textile specific but have been extended to different sectors.
The finance minister expressed the confidence that the revenue target of Rs 4.7 trillion set for the current fiscal year will be achieved by June 30. He maintained that a tax collection target of Rs 5.8 trillion has been set for the next fiscal year, which he will achieve through innovative approaches including the use of latest technology.
He said that allocation for the Public Sector Development Programme (PSDP) has been enhanced significantly to take the country towards sustainable growth.
He said that in order to broaden the tax net, the government will bring in a prize scheme to encourage people to demand proper receipts for purchases they make from retailers.
Tarin said the government will introduce a scheme, under which prizes amounting to Rs 250 million will be distributed among receipt holders every month. He added the move would help in documentation of the economy.