File photo of Finance Minister Ishaq Dar, courtesy PID
Finance Minister Ishaq Dar on Sunday claimed the government will unveil a welfare-oriented, pro-investment and business-friendly budget for the upcoming fiscal year.
Speaking with a private media channel, he said the aim was to provide maximum relief to the public, adding the government would introduce long-term policies aimed at sustainable economic growth and achieving economic targets to take the country forward. “We will try our best to make a budget according to people’s wishes and without putting more burden on the business community,” he said.
During his media appearance, the minister reiterated his criticism of pundits warning of impending default, stressing the threat had been averted despite multiple challenges. He also reiterated his criticism of the Pakistan Tehreek-e-Insaf, urging the party leadership to avoid damaging state institutions or the nation’s reputation and work for the betterment of the country. To a question, he said the government was aware that traders desired more incentives. “We are working on different long-term proposals to lift this sector and put the country on the right path,” he claimed.
Also on Sunday, Dar separately met a joint delegation of the Pakistan Stock Exchange (PSX) and the Mutual Funds Association of Pakistan (MUFAP) as well as a delegation of the Overseas Investors Chambers of Commerce and Industries (OICCI).
In their meeting with the minister, the delegation of MUFAP and PSX presented proposals aimed at encouraging the public to invest in the stock market and promote mutual funds. Noting the erosion of market capitalization over the past six years, the delegation stressed that the stock market was a highly documented segment and a significant contributor to the national exchequer.
According to a statement issued by the Finance Ministry, Dar said he was equally concerned about the stock market’s erosion, recalling the PSX had once been among the best-performing markets in the region. Assuring the delegation their concerns would be addressed, he said efforts would be taken to encourage investment in Pakistan. The MUFAP representatives, meanwhile, highlighted the growth of sharia-compliant mutual funds and proposed the launch of short-term sukuk bonds.
The OICCI, in a separate meeting, urged the government to abolish super tax and bring the trade, services, real estate and agriculture sectors into the tax net in line with their share in the economy. It suggested capping corporate tax rate at 29% in the upcoming budget, and proposed a freeze on any further increases to the effective tax rate to make the industry regionally competitive. The delegation also recommended simplifying the withholding tax regime to make it more business-friendly and proposed increasing the threshold for tax-free income from the existing Rs. 0.6 million to Rs. 1.2 million.
The OICCI delegation further stressed the need to broaden the tax base to boost revenue collection, claiming that this could boost the tax-to-GDP ratio from less than 10 percent currently to 16 percent.