News
Sunday, June 05, 2011
Govt for checks and balances on defence spending
* Finance minister says all defence needs will be met at any cost
* Hints at increase in subsidies for poor
* Says all taxes except income tax and sales tax will be abolished
By Sajid Chaudhry
ISLAMABAD: Federal Minister for Finance Abdul Hafeez Shaikh on Saturday said that government will not compromise on defence budget as it is a national obligation and necessary for the security of the country, but stressed that the money should be spent properly with appropriate checks and balances in place.
Addressing a post budget press conference here, the federal minister said that government tried its best to cut expenditures wherever possible, however there are certain expenditures including defence, which are essential for the country and could not be curtailed. The minister said that in expenditures in the budget for upcoming fiscal year have been budgeted responsibly. He said tough decisions have been taken to stabilise economy and improve employment opportunities in the country.
Shaikh hinted at increase in subsidies for the poor during the next fiscal year provided the fiscal position of the government improves. He strongly defended the reduction in subsidies and categorically said that the govt was ready to subsidise the electricity for those who use single light in their homes but can’t subsidise the for those who use subsidised electric power for warming water of their swimming pools. He said reforms, especially in the power sector, have started yielding results and that there will be no need to maintain heavy subsidies in future. “Even World Bank and the Asian Development Bank have endorsed our effort for maintaining certain level of subsidies in the budget,” the minister maintained.
The minister stressed that there should be only two taxes ie income tax and sales tax. Government has totally abolished special excise duty on hundreds of items, regulatory duty on 392 items, he said and added that the federal excise duty on all items will be abolished within next three years.
The minister said that some 2.3 million rich of the country have been identified and they will be brought into tax net in phases, with realization of Rs 0.8 million tax from each of the 70,000 rich who are being issued notices.
He explained that the newly identified 2.3 million rich are those people who are reside in posh areas like defense, sector F-7, etc, operate at least two foreign accounts, spend more than 60 days abroad on business or reassure trip by traveling in business class and don’t have any national tax numbers nor pay any tax.
Courtesy www.dailytimes.com.pk