Punjab budget will not introduce new taxes: minister

LAHORE: Punjab Finance Minister Mujtaba Shujaur Rehman said on Monday that the provincial government would not introduce any new taxes in the upcoming budget, which is scheduled to be presented on June 16, making it the third straight year the province has opted against fresh taxation.

Speaking at a pre-budget roundtable organised by the Punjab Finance Department, the minister said the government was finalising what he described as a public-centric financial plan. He said the consultation was the first event of its kind and brought together a broad range of stakeholders, including representatives of international donors, chambers of commerce and industry, academia, agriculture and textile associations, media and civil society, so they could directly share their concerns and proposals.

Rehman told participants the exercise was not merely symbolic and said the government would incorporate their recommendations into the final budget as far as possible. He added that the administration planned to hold such consultative sessions in May in future years so there would be more time to factor in public input before the budget is finalised.

Focus on growth and employment

The minister said the new budget would place strong emphasis on economic expansion, with job creation and investment in industrial infrastructure among the government’s main priorities. He said the province aimed to finance these goals by widening the tax base, encouraging industrialisation, establishing economic zones and improving the ease of doing business rather than imposing new duties.

He said Punjab’s available resources were limited in relation to the needs of its population of 130 million and added that the government had also been facing pressure from the IMF. Even so, he said the leadership was "absolutely unwilling" to place additional tax burden on ordinary people.

Rehman also referred to what he described as a difficult fiscal year shaped by global economic pressures and natural disasters. He said Punjab had recently gone through the worst floods of the century, which affected 27 districts, and added that the provincial government carried out the rehabilitation process from its own resources without financial assistance from the federal government.

Stakeholders raise concerns

At the roundtable, Federation of Pakistan Chambers of Commerce and Industry regional chairman Zaki Aijaz called for lowering industrial production costs, saying these were 30 to 35 per cent higher than in other countries in the region. He also said higher taxes in Punjab compared to other provinces were discouraging industrial growth in the province.

Pakistan Hi-Tech Hybrid Seed Association leader Shahzad Ali Malik said the government was speaking of promoting mechanisation in agriculture while at the same time levying a 5pc tax on those renting farm machinery to small farmers and a 16pc tax on agricultural advertisements.

Former Lahore Chamber of Commerce and Industry president Anjum Nisar urged provinces to develop water reservoirs instead of depending solely on the federation. Rice exporter Imran Sheikh asked the government to ease the import of used kabota rice harvesters and reduce taxes on them, saying this could help cut crop losses of 30pc caused by the use of wheat harvesters for rice. Potato Growers’ Society president Maqsood Jutt proposed introducing technology for maize processing so the crop could be preserved for human consumption instead of being diverted to poultry feed.

The finance minister assured participants that their proposals would be considered in the budget-making process.