Asset Declaration Scheme deadline extended to July 3: Hafeez Shaikh
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Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh during a post-budget press conference on Sunday said that the government had decided to extend the deadline for its Asset Declaration Scheme to July 3.
"There's been a lot of interest in the Asset Declaration Scheme," he said, adding that the deadline had been extended to banking office hours on July 3.
"We are giving people a final opportunity [to take advantage of the scheme] in case some people are still in the process or are facing difficulties wrapping it up," he said.
"After that, the benami commission, that we're currently establishing to pursue benami properties, will come into action," Shaikh said.
Minister of State for Revenue Hammad Azhar, who was also at the briefing, said that thousands of people had availed the scheme so far. "We'll put forth the details of this scheme in a few days," he said.
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The deadline extension comes barely a day after a statement issued by the Federal Board of Revenue denied that there would an extension in the scheme.
Budget strategy and priorities
Shaikh, while discussing the government's budget strategy at the press conference in Islamabad, said it was part of its agenda to "make all things transparent. To utter nothing but truth in front of the public. That is precisely what is reflected in this budget."
"That's why we are announcing that we are going to the International Monetary Fund programme. We're sending a message to everyone out there that we're serious and ready to take hard decisions so we can propel ourselves along a growth trajectory."
"Our focus is to generate confidence in markets and put the reforms in proper sequence. The idea is to do all this in phases, not abruptly," he explained.
He indicated five key elements of the budget that are part of the government's strategy to tackle the crisis:
- Managing the external front
- Strict austerity
- Helping the poor/social welfare
- Helping industrialists
- Mobilising revenues
"At the heart of the budget are the people of Pakistan, because a government's success can only be assessed on the basis of how good it is for the people," Shaikh said.
"And if harsher than harsh measures need to be taken, we shouldn't shy away from them," he said.
1. External threats
"When the PTI was elected into government, it inherited an economic crisis that it is still trying to get out of," Shaikh said, explaining that due to the current account deficit and foreign loans, the external front was a matter of great concern.
"We took immediate steps to curb the external threats. We tried bringing down the Current Account Deficit. We imposed tariffs on imports and that too on luxury products & finished products; to squeeze imports. And that has continued in this budget.
Due to foreign loans and the import-export gap, the rupee devalued in comparison to the dollar. The first step, Shaikh said, was to reduce the current account deficit.
This was achieved by levying tariffs on imports ─ particularly luxury goods and finished products ─ to reduce the purchase of such products. "The current account deficit was $20 billion when this government came to power, but it has now gone down to $13.5bn," he said.
"The budget has suggested measures that will bring it down further to $7bn."
The government also managed to acquire $9.2bn in loans with friendly countries, including deferred payment facilities with Saudi Arabia and United Arab Emirates, while the government is in talks with Qatar over similar arrangements.
"Things are also on the right track with the International Monetary Fund," Shaikh said. "If everything stays on course, they will give us a $6bn package, and taking a cue from them, the Asian Development Bank has also committed some money. This will be disbursed during the year. We have similar hopes from the World Bank."
"These were the steps we took to generate dollars," he said.
2. Austerity
In order to repay debts taken by previous governments and make payments to provinces, the government needs to save money, Shaikh said.
To do this, the government has begun to implement austerity measures starting from the top, with Grade 20+ civilian or military officers not receiving any increment in the budget, while Grades 17-20 received a 5 per cent increase, while Grades 1-16 received a 10pc increment in their salaries.
"For the first time in Pakistan’s history, armed forces have not got a budget increments. This sends a message that everyone is on same page regarding taking Pakistan out of this challenge," Shaikh said.
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3. Social welfare
The adviser on finance said that the government had decided that if any money is spent this fiscal year, it would be focused on the neediest sections of society first.
The government had, therefore, increased social safety net budget allocations to Rs191bn from Rs100bn.
Additionally, Rs200bn was allocated to provide relief to low-energy consumers who utilise less than 300 units of electricity.
"Then we allocated money for the people of the tribal areas. We believe that is the third most deserving strata of the government's relief efforts," Shaikh said.
"Social security nets that alleviate the poor, widows who run their households and the weakest segments of society get precedence in the government's priority list for relief."
4. Industry-boosting measures
Businessmen were also given some relief in the budget, Shaikh said, explaining that import tariffs on a number of raw materials had been slashed to 0pc so that the cost of doing business was manageable for businessmen.
Similarly, Shaikh said, the tax on exports has been exempted.
5. Revenue collection
The prime minister's adviser on finance said the government had set itself an FBR revenue target of Rs5.55 trillion for the coming fiscal year.
"The rich of Pakistan pay the lowest tax in our region. It cannot go on like this," he said, adding that the government was "all set to achieve" its tax collection target.
He explained that the measures related to taxation and revenue collection were necessary because the government wants to spend on improved infrastructure, education, better healthcare and clean water, but needs funds in order to that.
"All the valid points we got as suggestions from Parliament and other stake holders, we tried to accommodate them to improve this budget," he said.
Minister of State for Revenue Hammad Azhar chimed in here to say that although previous governments had talked about merging FBR data with the National Database and Registration Authority for 10 years now, the Pakistan Tehreek-i-Insaf government had managed to do it within 10 days.
"Basic steps for broadening our revenue that have not been taken in the past 10 years, we took in our first 10 months," he added.
FBR Chairman Shabbar Zaidi, at the press briefing with his colleagues, said that people had previously "never had a good reason to think that the government has some sort of data on them regarding their taxes".
"Now we have integrated data that serves as a driving factor," he stated.
Azhar, explaining taxes on cigarettes, denied the impression that taxes on the tobacco industry had been revoked to appease any lobby.
"The only revoked taxes are import taxes. Taxes on tier 1 and 2 have been increased per pack of cigarettes, upto Rs8 even. All this money will be directed towards healthcare," Azhar said.
