Tax on 5-minute mobile phone calls stays; no levy on food items, NA told

Shaukat Tarin announces various tax measures while winding up budget debate in National Assembly: Tax-evaders to face arrest: Tax on poultry reduces from 17% to 10%: Tax on property, gold lowered: Rs5 billion set aside for electronic voting machines (EVMs): Govt introducing new ‘My Car’ scheme: Small cars to be exempted from tax

By: News Desk      Published: 03:06 PM, 25 Jun, 2021
Tax on 5-minute mobile phone calls stays; no levy on food items, NA told
Shaukat Tarin delivering a speech in the National Assembly.

Finance Minister Shaukat Tarin has said that the government has rejected the IMF condition to levy taxes to the tune of Rs700 billion, saying the government would increase tax net as it has found profile data of 15 million people who are not paying taxes, reported 24NewsHD TV channel.

He said notices to these 15 million tax evaders would be sent through a third party. He disclosed that through electricity bills, millions of tax evaders had already been identified and tax recovery would be made from them. He warned the tax evaders of possible arrest in case of their tax evasion. At the same time, he resolved that he would not let the FBR harass people.

Finance Minister Tarin while winding up budget debate in the National Assembly on Friday said that a tax of 75 paisas would be charged on a mobile phone call that would be longer than 5 minutes. He, however, said that a tax on special mobile phones for the blind had been withdrawn.

It is to be recalled here that Mr Tarin during his post-budget speech on June 12 withdrew the proposed tax on mobile phone calls and SMS. But today he took a U-Turn and again put a levy on the mobile phone calls.

He announced that the tax imposed on food items had been withdrawn. However, levy on poultry was slashed from 17% to 10%. He further stated that there would be no tax on flour and related items. 

He told the house that small cars having 1,000cc engine capacity would be exempted from tax. He informed that tax on medical bills of government employees was also withdrawn. 

Mr Tarin informed that the rate of property tax had been reduced from 35% to 20%. Moreover, the levy on gold and silver has been slashed from 17% to 7% and 3%. 

The finance minister again told the lower house when the PTI government got power, it was bequeathed by a $20 million current account deficit. He claimed that at that time, the growth was made on borrowed money. In 2018, the debt reached $30 million. He said that the PTI government was left with no other option but to go to the IMF. 

He revealed that the global lender attached strict conditions to the grant of loan money. The government had put discount rate at 13% and raised the tariff. These measures put the growth rate at 2%, the minster said adding that on top of that the country was hit by coronavirus pandemic. He said in order to avert the Covid-19 adverse economic impact, the government decided to promote industry, increase exports and encourage agriculture, so it took loans. He was of the view that Covid-19 pandemic impacted the entire world and slowed down the economy. 

He said the government had told IMF that it could not put extra burden of taxes on people. Prime Minister Imran Khan was against the imposition of taxes on people, he added.

Mr Tarin said that our growth rate had reached 4% and envisioned a high growth rate in coming years. He maintained if there was no growth, the wheel of economy would not be chugged. There will be no jobs, he added. He stated that the government did not depend on the 74-year-old strategy, rather it would give interest-free loans. 

The minister held that Prime Minister Imran Khan had a vision about dams. No political party pays attention to this issue because dams are built after a long time, Tarin added. 

He stated that Rs5 billion were set aside for electronic voting machines (EVMs). Rs260 billion have been earmarked for Ehsas Programme, he said adding that Ehsas Programme was a flagship programme of Imran Khan. He maintained that Rs12,000 had been given to the deserving people under Ehsas Programme. 

Mr Tarin hoped that in the next 2-3 years, the IT sector would earn a foreign exchange to the tune of $7 billion to $8 billion. He said the government had accepted all the demands of the IT sector. 

He said that government would set up cold storages in farmers’ market. He stated that wholesalers and farmers could also sell their commodities in the agriculture malls. He was hopeful to spread the agriculture malls network all over the country. 

Mr Tarin stated that textile subsidies would remain in place. He maintained that the government was putting special emphasis on exports. He held that there would be special power tariff rate for industrial purposes. 

The finance minister said that the government was introducing a new scheme by the name of ‘My Car’. He also said that a new system for the sale of agriculture produce minus the role of middleman was being launched. He said agriculture loans would be given. 

He was of the view that government gave special attention to Small and Medium-Sized Enterprises (SMEs). He touted that the government had set aside Rs45 billion subsidies to industrial sector. He announced to abolish tax on agricultural machinery. 

Mr Tarin divulged that the government had allocated funds for Karachi Transformation Plan and for Balochistan. For 14 districts of Sindh, funds have been earmarked, he added. 

He said that PM Khan took steps for the development of agriculture and construction sectors and hoped the government would achieve its revenue target in the current year.

He said the government had set aside funds for interest-free loans, Sehat card and training and skill enhancing programmes in the budget.