Relief oriented budget

THE budget for the year 2020-21, presented by Federal
Minister Hamad Azhar in a lifeless session of the Na
tional Assembly on Friday, would surely evoke mixed response from different segments of the society as it contains significant relief for some and ignored expectations of others in the backdrop of the situation arising out of Covid-19. The Minister preferred to call it a ‘relief budget’ as, according to him, no new tax has been imposed but it is not certainly the case as rate of some taxes and duties have been jacked up.
The budget rightly focuses on revival of economy, which suffered huge losses due to Coronavirus, and zero duty announcement for import of raw material (twenty thousand tariff lines) and reduction of customs duty for other two thousand would help stimulate industrial activity, boost production to meet local and export requirements and revive prospects for employment. Halving of regulatory duty for local engineering and smuggling prune items is also a step in the right direction. The Government has understandably increased budgetary allocations for the health sector, which is bearing the brunt of the prevailing crisis and investment in the sector is worth making. Increased allocations for higher education were also need of the hour in view of the role that the higher education and research and development plays in the overall development of the country. Measures announced for streamlining of withholding tax regime and ease of doing business would also be greeted by the business community. The decision not to charge advance income tax on vehicles upto 200 cc would provide relief to lower income groups. Relief provided in capital gain tax for the sale of immovable property would hopefully help boost real estate business. Duty on cigarettes has been increased significantly but this would be welcomed by all as it might discourage the smoking trend. The Government has made compressed allocations for developmental activities, which is understandable in view of its financial constraints as tax collection is falling down especially due to Covid-19. Increase in defence budget had also become evitable due to regional security environment and continued threats to the country. The budget seems to have been prepared under strict guidelines of the IMF as there was no announcement for even smaller increase in salaries
and pensions despite the fact that these segments too are hard pressed due to record inflation and Corona situation. It is a great disappointment for them and the Government should review its decision in this regard before passage of the budget by the National Assembly.