Federal Minister for Finance and Revenue, Shaukat Tarin, has ruled out the speculations, being expressed by many, that the supplementary finance bill will cause an increase in inflation.
Addressing a press conference, jointly with Minister of State for Information and Broadcasting, Farrukh Habib, Tarin said the government had proposed to withdraw tax exemptions of Rs. 343 billion out of which Rs. 272 billion taxes were refundable or adjustable.
The minister said that proposed new taxes only amounted to Rs. 71 billion, out of which Rs. 69 billion taxes were on luxury imported items such as imported fish, high-end bakery items, imported cheese, and imported bicycles.
“We have proposed removal of only Rs. 2 billion tax exemptions on the items that can be related to the common man which would have a negligible impact on inflation,” the minister said.
“The International Monetary Fund (IMF) had asked us to impose Rs. 700 billion in new taxes but we negotiated and brought it down to just Rs. 343 billion,” he explained.
Giving a breakdown of the tax exemptions being withdrawn, the minister said the Rs. 112 billion tax exemptions on machinery and Rs. 160 billion tax exemptions on the pharmaceutical sector would be refundable or adjustable.