Govt announces changes in new budget

ISLAMABAD: The government on Monday announced a series of changes in the new budget in the National Assembly, increasing an ad hoc allowance for low-paid government employees to 20 per cent from 15 per cent and providing relief to importers, exporters and the print media.

The Minister of State for Finance and Economic Affairs, Hina Rabbani Khar, revealed the amendments while winding up a general debate on the budget for fiscal 2009-10, saying the government had incorporated ‘a large majority’ of proposals and recommendations made in the debates in the National Assembly and the Senate.

The changes included the exemption of compressed natural gas (CNG) from a proposed carbon surcharge as promised by Prime Minister Yousuf Raza Gilani last week, which she said would mean an across the board relief of Rs12 billion to consumers.

The carbon surcharge on petroleum products, as proposed in the budget, will continue in place of a petroleum development levy.

Ms Khar said the increase in the ad hoc relief, which was announced in the budget presented to parliament on June 13, would apply to civil employees in basic pay scales (BPS) 1-16 as well as to armed forces personnel in equivalent scales who were earlier allowed a 15 per cent increase.

‘The ad hoc relief announced for old pensioners who retired 10 years ago or earlier is being revised and they would now enjoy the benefit of a 20 per cent increase in net pensions,’ she said.

Other relief measures announced by her and to be provided by amending the new Finance Bill are:

- For manufactures, withholding tax to be lowered to three per cent from four per cent for industrial imports, involving a relief of over Rs5 billion.

- Income tax collected on export proceeds to be made final discharge of the exporters.

- Print media to be helped in ‘their difficult situation’ by exempting newsprint import from the levy of 16 per cent General Sales tax -- to be now subject to five per cent customs duty only -- and no withholding tax to apply to classified advertisements. ‘These measures will provide a relief of Rs1 billion to the newsprint sector,’ the minister of state said.

- The difference in the charge of additional tax on delayed payments and compensation on refund to be reduced to three per cent from the present about 12 per cent.

- Requirement of National Tax Number and Computerised National Identity Card for sales to unregistered purchasers to be withdrawn, and presentation of NTN for opening a bank account to be made voluntary as per requirement of the bank concerned.

- The procedure relating to resolution of tax disputes to be streamlined and simplified and ‘all such proposals that were considered to be unnecessarily harsh and punitive like conducting raids on business premises without approval of FBR’ (Federal Bureau of Revenue) to be withdrawn.

- The concept of third-party audit by an established and certified chartered accountant to be introduced, but it would be ensured that it does not result in unnecessary harassment of business concerns.

- On the demand of youth and children, additional federal excise duty of 20 paisa per SMS to be withdrawn but the revenue loss from this measure to be compensated by increasing the additional FED on cellular services to 19.5 per cent from 19 per cent.

New NFC in July

Referring to repeated opposition criticism about a perceived delay in the formation of a new National Finance Commission (BFC), Ms Khar said the seventh NFC would be reconstituted and convened next month and its deliberations would be completed ‘at the earliest and hopefully within three months of the first meeting’.

She said consultative process with the standing committees on finance and revenue of both houses of parliament would in future begin two months before the presentation of the budget and that from the next financial year, the government ‘shall ensure’ to present the budget to parliament on or before May 30 to allow a larger parliamentary scrutiny of the fiscal measures.

The government, she said, had also decided to present its financial and fiscal performance to the standing committees for a quarterly review. link...