Hafeez Shaikh plans 10-minute budget speech
ISLAMABAD: With consultation process for the upcoming budget in the final stage, Finance Minister Dr Abdul Hafeez Shaikh is likely to restrict his budget speech to unusual 10-minute duration in view of expected strong protest from Pakistan Muslim League-N over political controversy surrounding the prime minister.
Informed sources told Dawn on Friday that speech writers at the finance ministry and federal board of revenue (FBR) had put together almost 90 per cent of the material for the finance minister’s budget speech that would be given final touches by Mr Shaikh on May 29-30 in the light of policy inputs from the political leadership and members of the economic advisory council (EAC).
Expecting rowdy scenes from the main opposition party amid “Go Gilani Go” slogans, the finance ministry officials said the finance minister would give ‘a comprehensive but brief’ budget speech covering 4-year achievements of the present government and budgetary measures for the next year.
“Depending on the ground situation, the minister may opt for an extempore speech and lay the written speech before the National Assembly,” an official said.
On Friday, the minister had a final meeting with the economic advisory council to finalise budgetary recommendations. The EAC made two key recommendations: housing finance should be made concessionary to promote construction industry to improve employment and to completely overhaul the SRO structure to remove discretion.
Earlier in the day, he said at a pre-budget seminar that there would be no unpleasant surprise for the honest taxpayers in the budget and focus would be to achieve simplicity in the taxation system.
He said the basic objective was to harmonise the tax system in the country to improve collection in a better way. He said the Constitution clearly defines the jurisdiction of taxes that fall under the federal and provinces domains but it was not only federal but provincial governments that are required to coordinate with each other to improve the tax collection to improve spending on health, energy, and education infrastructure.
He said that taxation was one of the areas where the country’s performance was not encouraging for various reasons — policy as well as implementation. The authorities have to increase their performance in broadening of tax base as well as simplifying the taxation system.
In the evening the member of the EAC made suggestions for the coming budget. The meeting was attended by former finance minister Shaukat Tareen, Nasim Beg, Hassan Ali Chandio and Dr Ejaz Nabi.
A sub-committee led by Nasim Beg recommended incentivising banks to increase lending to private sector, promoting thrift and increase saving rate, rewarding taxpayers to allow some investment abroad and creating employment through construction industry. He also presented recommendations of the Securities and Exchange Commission of Pakistan for encouraging corporatisation instead of encouraging creation of small companies to avoid taxation and to remove anomalies for consolidation of corporate sector.
An official said some of the participants, including Shaukat Tarin, criticised some of the recommendations for the stock markets and raised questions over possible issues on housing finance proposals, seeking more debate instead of incorporating such proposals in the budget.
Another committee led by deputy chairman planning commission criticised the culture of special regulatory orders and added that 84 per cent of the trading sector was being affected by the discretionary orders like SROs.
The sub-committee pointed that the existing SRO structure made tariff structure convoluted and complex that was adversely affecting the SMEs and all other industries in Pakistan. They further proposed that the existing culture should be changed and a tariff rationalisation committee comprising representatives of both private and public sector should be constituted to give operational recommendations.
The EAC also considered FBR proposals for reforms and enhanced automation to improve revenue collection. FBR Chairman informed the council that tax base would be broadened in two ways. One through increase in the number of taxpayers and other through launching automated integrated tax management system. The FBR chairman told the meeting that filing of tax returns would be encouraged and the salaried class would be given tax relief in the coming budget.
A sub-committee on agriculture headed by Mr Hassan Ali Chandio highlighted problems and possible solutions in agriculture sector and recommended increasing productivity through organic fertilisers, enhanced and easy credit form banking sector, incentives for promotion of value addition, ensuring quality seeds, introduction of agriculture development account in banks and giving incentives to local manufacturer on agriculture machinery.