ISLAMABAD June 22: Finance Minister Shaukat Aziz announced in the National Assembly on Tuesday withdrawal of some duties and reduction in a number of taxes he had proposed on June 12 in the budget for 2004-05.
Winding up the general debate on the budget, the minister said that the 5 per cent tax on computer parts, the duty on composite diagnostic kits and the 2pc withholding tax on import of tractors had been withdrawn.
He said the capital value tax (CVT) on purchase of stock exchange shares had been reduced to 0.01pc from the proposed 0.1pc.The minister said some new taxes had been levied on the purchase of shares in consultation with the representatives of the three stock exchanges in the country.
These include a presumptive tax at the rate of 0.005pc, an adjustable withholding tax at the rate of 0.005pc and 10pc withholding tax on share purchase. The 5pc tax proposed in the budget on computer parts has been withdrawn and it will now apply only to imported computers.
Anyone arriving from abroad will, however, be allowed to bring with him two laptop computers without paying any customs duty. The customs duty on local iron and steel, which was proposed to be more than 5pc, has now been fixed at 5pc.
The minister said that in order to bring the tractor prices down, its import would be allowed under a gift scheme in the new trade policy and added that 2pc withholding tax on import of tractors had been withdrawn.
He said that 14 recommendations sent by the Senate on the budget would also be incorporated into the Finance Bill. He defended the enhancement in the defence budget, saying "a secure Pakistan from aggression of any country will ensure its progress and advancement". The boosting of the defence capability would guarantee economic sovereignty of the country, he added.
Mr Aziz said that the country, which was close to default five years ago, had achieved economic growth and broken the begging bowl forever. He said the budget was historic in many ways with a record Rs202 billion Public Sector Development Programme and substantially increased allocations for the education and health sectors.
He blamed the previous governments' policies for the country's poor social sector development. He said that extravagant spending of foreign loans on non-development activities in the past had brought the country under the IMF stranglehold.
He hoped that the country would come out of IMF's dependence by the end of this year and would regulate foreign loans under a 'fiscal responsibility law' to be approved by parliament.
He said that work on the Gwadar port, coastal highway, Thar coal project, Saindak project and Gomal Zam, Mirani and Satpara dams had been undertaken. Allocations for the development of Fata had been increased by four times, he added.
He said the objective of the government's economic policies was to take Pakistan to a level of economic progress that China, Malaysia and Thailand had achieved. He said President Pervez Musharraf wanted to hand over a 'vibrant and exciting' Pakistan to the new generation but added that this objective would remain a dream if the opposition continued an atmosphere of confrontation.
Earlier, on a point of order, MMA's Liaquat Baloch proposed the formation of a committee headed by the speaker to examine the recommendations made by the Senate and make changes in the Finance Bill.
Opening a debate on the charged expenditures, Mr Baloch stressed the need for drastic changes in what he called the outdated financial legacy of the 1935 Finance Act and said that all heads, including defence, should be debatable by parliament.
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