Budget Speech

Bismillah Hir Rehman-i-Rahim

Mr.Speaker

It is a matter of privilege for me to present in this august House the Federal Budget for the year 1999-2000 .

Mr. Speaker

2. The coming year is significant as it is being preceded by an eventful year. This is the last year of the current Century; one millennium is ending and a new one is rising on the horizon. With the grace of Almighty Allah, we are parting from the present Century with confidence and preparing ourselves to welcome the next one with renewed determination and courage. The atomic Pakistan is full of zest to discover new horizons and over-power the issues facing it. Pakistan which was created under the dynamic leadership of Quaid-e-Azam Mohammad Ali Jinnah has now become a symbol of new vigor and vitality under the leadership of Prime Minister Mohammad Nawaz Sharif.

3. I have no words to thank the Almighty Allah, for His boundless grace and mercy in helping us in thwarting the designs of the enemies and in overcoming the difficulties posed by economic sanctions, recent floods and other internal and external challenges. A year which was being predicted as the year of despair and dejection by some political and economic experts and analysts is ending as a year of hope and consolidation. We have passed through a difficult and challenging period. The economic sanctions imposed on us as a reaction to the detonation of the nuclear devise by us put extreme pressure on the economy, in particular on the balance of payments. The continuation of South East Asian Turmoil and the propaganda and unscrupulous behaviour of some vested elements within the country also added to the difficulties. However, this could not deter our determination and we faced the situation with caution, foresight and courage yielded positive results of the reforms and measures undertaken by the Government in agriculture, industry, trade, finance and other fields.

Mr.Speaker

4. One should remember that with assuming office by Prime Minister Mohammad Nawaz Sharif, the economic, agricultural and industrial growth had started reviving.Inflation had reduced from 11.8 percent in the previous year to 7.8 percent. Budget deficit came down from 6.3 percent of GDP to 5.4 percent. Balance of payments and foreign exchange reserves had also improved. In short the economy was moving towards growth and stability rapidly.

5. The imposition of sanctions and putting assistance programme in abeyance by the international financial institutions following the events of May 28,1998 adversely affected the development process and brought the economy under severe pressure. The Government therefore took emergent measures to maintain stability and safeguard the balance of payments and foreign exchange positions. These steps included restrictions on foreign currency accounts and facility to convert them into special dollar bonds; depreciation of rupee, imposition of 30 percent LC margin on imports, introduction of multiple exchange rate system, restrictions on foreign exchange payments and reduction in budget expenditure. It was, however, ensured that these measures had minimum effect on the common man. We also continued consultations with IMF and other international financial institutions which resulted in reactivating their agreements and assistance. The situation had stabilised to a large extent. The Government following decisions taken in March and April 1993 relaxed the restrictions and took a number of steps including:-

- withdrawal of 30 percent cash LC margin requirement on imports;

- changing the composite currency rate from 50:50 to 95:05 and subsequently replacing it by a unified exchange rate systems;

- removing capital controls and reviving the facility of transfer of earnings, profits, capital in foreign exchange to the airlines and shipping companies;

- rationalising the duty drawback rates of some 300 items;

- reducing the number of SROs relating to duty drawbacks from 114 to 4 to facilitate exports;

 

- enhancing the amount earmarked for export refinance scheme by three-fold and enlarging its scope to additional items;

- withdrawing restrictions imposed on obtaining foreign exchange from banking system for education, health and travel purposes;

- reducing further the maximum rate of customs duty from 45 percent to 35 percent and the number of custom duty slabs from 5 to 4 (While doing so due consideration has been given to providing adequate protection to the domestic industry); and

- taking appropriate action leading to reduction in mark up rates and thereby encouraging investment and economic activity.

These measures reflect the determination of the Government to persist with its programme of stabilisation and structural changes despite difficulties.

Strategy for the next year

6. In formulating the strategy for the next year a number of factors need to be taken into account; the main being the world economic situation, current domestic developments, past trends, future medium term plans, and the aspirations and expectations of the people.

7. The recessionary trend in world economy and the after effects of the East Asia Turmoil are persisting. These will have adverse affects on our exports, foreign investment and inflow of resources.

8. It is a matter of satisfaction that despite world recession and difficult conditions at home, we have been able to maintain positive economic growth with stability in the current year. Though a number of targets will not be achieved, the performance during the year on the whole remains satisfactory. Preliminary data reveal that during the current year the economy is expected to grow by 3.1 percent, inflation rate at 6.1 percent, and investment and national savings will be 15 percent and 12 percent of GDP respectively. Due to sharp fall in imports the tax revenues declined substantially.

9. We have steered through a difficult period, yet many economic and social problems need to be resolved. As they are deep rooted and complex determined and persistent efforts are required for their eradication. It is the sincere endeavour of our Government to over come them as quickly as possible. The Government is therefore working on a comprehensive, integrated and multi-year agenda. The budget for the next year is an important step of this agenda.

Mr.Speaker

10. Our policies and programmes are aimed at on the economic and social wellbeing of the people and stability and development of the country. We are proposing such steps as will accelerate the pace of economic development, ensure financial stability, promote favourable climate for investment and savings, persist with basic economic reforms, create new employment opportunities, expand and upgrade social services such as basic education and health, enhance self reliance, and ensure good governance and improved performance of Government agencies.The target set for the next year, which are also a part of our medium term strategy, are to:-

(1). attain 5 percent growth in GDP, 4.3 percent in agriculture and 5.8 percent in manufacturing;

(2). further reduce the rate of inflation to 6 percent;

(3). create 800,000 new job opportunities;

(4). raise the level of investment from 12.5 percent to 14.5 percent of GDP in the next year and to 16 percent by the year 2002;

(5). increase exports by 18 percent, bring down the current account deficit to $ 1.8 billion, and also reduce dependence on external resources;

(6). reduce the budget deficit to 3.3 percent of GDP;

(7). ensure greater access and improved quality of social services, in particular in education, health, population welfare, sanitation and water supply sectors; and

(8). expand infrastructural facilities, in particular, farm to market roads, roads, communications,rural electrification, gas and potable water.

Measures for economic growth and stability

11. For accelerating the pace of economic growth it is essential that not only investment is increased but a major portion of it should come from national savings. The Government has taken a number of measures to promote investment and savings. Reforms of the banking and financial sectors and capital market have been introduced. Credit facilities for agriculture and industry have been expanded. The rates of customs duties have been reduced and the import policy has been liberalised. Business confidence has improved. We hope that these measures will yield further positive results. We estimate that in the next year investment will increase by one-third; and a major portion of this increase will come from the private sector. The public sector investment is also expected to increase by 16 percent, a major portion of which will be allocated to such key sectors as education, health, irrigation, roads, communications and energy. These will also accelerate social development and result in opening up new avenues of income and employment. In addition to expanding investment, efforts are also being made to utilize the existing productive capacity with greater efficiency.

Agriculture

12. Agriculture remains a priority area. Steps being taken to expand agricultural production include:-

- substantial increase in credit facilities;

- easy and at reasonable prices, availability of fertilizer, certified seeds, pesticides, tractors and implements;

- exemption from General Sales Tax on cattle feed for the development of livestock sector;

- promotion of edible oil seeds;

- promotion of agricultural research, especially for raising productivity;and

- tax exemption on tractors and substantial reduction in their prices.

 

Industry

13. We are following such policies which will not only increase industrial investment but will also encourage efficient utilisation of existing capacity. These measures include rationalisation of customs duties, liberal import of raw materials, exchange rate adjustment, banking, financial and capital market reforms and financial assistance of Rs.200,000 for the promotion of ISO 9000 certification. Special attention is being paid to small and cottage industries which will generate larger employment opportunities and help reduce poverty.

Foreign Trade

14. Revival of growth and investment will also help in overcoming the stagnation in exports and improvement of the external sector of the economy. We expect that next year exports will increase by 18 percent, home remittances by 26 percent and imports by 8 percent thereby improving current account balance and foreign exchange reserves.

Banking and financial sector reforms

15. In pursuance of the banking and financial sector reforms, the monetary management is being undertaken through open market operations. In order to speed up the recovery of banks loans, 34 banking courts have been set up in which banks and financial institutions have registered thousands of cases for recovery of billions of rupees. The Government is not satisfied with the speed and recovery of these loans. It has therefore been decided to set up a task force to suggest measures for expediting the recovery process.

Capital market developments

16. The autonomous Pakistan Securities and Exchange Commission, which has replaced the Corporate Law Authority has started functioning and which may help in protecting such situation as the one recently witnessed the South East Asia. Other measures taken in this direction include reorganisation of stock exchanges and appointment of professionals on their boards of directors, establishment of Central Depository Company and rationalisation of tax treatment of capital market institutions and instruments.

17. For promotion of capital market following decisions have been taken:-

(i) In response to an outstanding demand of the corporate sector we have decided to allow companies to buy back their own shares(i.e.Treasury Stocks). This decision has been taken after careful consideration and necessary safeguards are being provided to ensure that the permission is not misused to the detriment of the interest of minority shareholders. Only such healthy companies would be able to avail of this permission which have excess liquidity and have sufficient levels of distributable profit. Management of companies shall be required to obtain prior approval of the shareholders after making full disclosure. In order to protect the interests of the creditors, equity of the company shall not be diluted as an amount equivalent to the repurchase price of shares is required to be transferred to a reserve account. We hope that this measure should contribute to stability in the market.

(ii) The Government has already taken a number of steps to develop debt market in the country. As a further step in this direction it is proposed to exempt income of institutional investors in term finance certificates from withholding tax.

(iii) An important area of capital market which we are addressing through this budget is providing institutional framework for asset securitisation. This will provide additional source of mobilisation of resources and will reduce reliance of corporate entities on the banking sector.

(iv) In the last two budgets a number of steps had been taken for the promotion of mutual funds. We are continuing this process and are providing certain additional facilities. One of the changes which is being introduced is that for the next two years, the condition of distribution of 90 percent profit for tax exemption would not be applicable to NIT. The policy is aimed at strengthening the NIT and facilitating its restructuring. It is also being proposed that income of both closed and open end mutual funds would be exempted from withholding tax.

(v) We have been receiving complaints that Annual General Meetings of a number of companies are being rendered meaningless through the practice of distribution of lavish gifts which often divert attention from meaningful discussion of the performance of the company. Annual General Meeting is an important instrument of improved corporate governance as the occasion provides an opportunity to the shareholders to critically evaluate the performance of the company. We are introducing changes in the Companies Ordinance prohibiting companies to distribute gifts in any general meeting.

(vi) In response to an outstanding demand of investors and financial institutions, we have removed the restriction on the classes of shares which a company can issue. under the new set up companies will be able to issue different classes of shares with varying rights and obligations. As such, the investor would be afforded wider opportunities of investments. It is hoped that the new arrangements would not only help in maximizing resource mobilization in the corporate sector but also facilitate privatisation of public sector institutions.

(vii) So far, our legal framework does not provide for arrangement for participation of the employees in the ownership of companies. We have now decided to introduce "Employees Stock Option Scheme". Under the new legal arrangements, companies would be in a position to allocate a percentage of shares for the employees while making right issues. Introduction of such a scheme would be voluntary. I hope that managements of companies would avail of this opportunity and give a greater sense of participation to the employees in the ownership of the company.

Public Sector Development Programme

18. It is unfortunate that in the past the Public Sector Development Programme had suffered due to financial stringency. We are breaking this practice by allocating Rs 116 billion for PSDP by next year, which is 18 percent higher than the current year. One of our priorities is to provide adequate resources for development purpose as far as possible. This will provide a base for further expansion in the public sector development programme.

Mr.Speaker

19. Economic programme without social development is meaningless. Unless people are provided with basic amenities the slogan of economic development will remain hollow. We have therefore increased the allocation for social sector by 122 percent next year. We are expanding the resources in rural areas and on the directive of Prime Minister Mohammad Nawaz Sharif have prepared an integrated programme for development of rural areas. The construction of over 5000 Kilometers of farm to market roads are on our priority. This will ensure just return and prosperity to the farmer. Rural electrification is also a priority area under which another 4,000 villages will be electrified next year. The major projects under implementation are:

- National Integrated Drainage Project;

- Islamabad-Peshawar Motorway, Dualisation National Highway (GT Road), Indus Highway and RCD Highway;

- Chashma Nuclear Power Project;

- Ghazi Brotha Hydro Power Project; and

          - Tameer-e-Watan Programme.

The completion of these programmes will transform the economic and social fabric of the nation.

20. In the context of economic and social development, an important steps taken by the Prime Minister is the initiation of an integrated programme of development of coastal region of Baluchistan. It includes construction of 790 Kilometers Makran coastal road, Pashin Turbat link road and deep sea port at Gwadar. It will be implemented on self finance basis over a period of three years. This will not only bring prosperity to the region but will also improve its link with rest of the country as well as with other countries, particularly the Gulf Region.

21. In addition to PSDP allocation of Rs.116 billion, the public sector enterprises such as PTC, WAPDA, OGDC and Gas Companies, will also spend over Rs.58 billion from their own resources. We are also encouraging the private sector to come forward and invest in these areas.

Measures for Social Development

Mr.Speaker

22. Social sector which has suffered due to past neglect is on top of our development agenda. The focus of our economic policies is not only economic wellbeing of the people but we are also taking specific steps for social development so as to expand the access and improve quality of social services and provide jobs opportunities. With your permission, Mr.Speaker, I would like to briefly dilate on the steps to be taken in the next year in various social fields.

Social Action Programme

23. The implementation of the Social Action Programme is being made more effective. It covers such basic facilities as elementary education, basic health, population welfare and sanitation and water supply is in full operation. In the next year efforts will be made to improve the access and quality of these services.

Health and Population Welfare

24. The new health policy which focusses on preventive health and basic health facilities is under implementation. The programme under implementation include PMs Health and Population Welfare Programme, health education, malaria control, prevention of AIDs and immunisition. Over 5 million children will be vexinated against six fatal diseases next year. Over 45,000 women have been trained and appointed as lady health visitors who are providing health and population welfare facilities in backward and rural areas. In the next year another 13,000 workers will be added. The Government is also encouraging NGOs, community organisations and private sector to provide health facilities to the people.

25. The efforts of government and private institutions have yielded positive results and the rate of population growth has declined from 3 percent in 1981 to 2.4 percent in 1998. We are confident that the programmes undertaken in collaboration with the people will not only reduce the population growth rate further but will also improve the health facilities for mother and child.

Education

26. New education policy is under implementation which assigns high priority to elementary education as well as technical and higher education. The public sector allocation for education is being raised from the current level of 2.3 percent to 4 percent of GDP by the year 2002. The private and non government sector is being encouraged in the education sector. The Social Action Programme is focussed on greater access and higher quality of elementary education. In addition, the Prime Minister's Literacy Commission has initiated the Non -Formal Literacy Programme for those boys, girls and adults who have been deprived of education. Under the programme 7,000 basic literacy centres have been established with enrolment of 25,000 students. A number of steps are being taken to improve the quality of education including proposal to establish Smart Model Schools at the district level. Besides upgrading the curricula, teachers training, and examinations systems, consideration is also being given to inculcating religious and national values among the students.

Science and Technology

27. We are giving special attention to scientific education and training. The Science and Technology Policy is under implementation and steps are being taken to upgrade the scientific research institutions and promote human development in scientific and technological fields. The National Information Technology Strategy is also being framed which will be launched shortly.

Environment

28. The pollution of environment is a critical issue for which an integrated programme is under implementation. Non governmental agencies and community organisations are also collaborating in the implementation of this programme.

Women Development

29. The social sectors programme, like SAP, health, education and population welfare, give special attention to women. In addition a number of programmes have been initiated specifically for the welfare, education and training of women. The Government is also encouraging and supporting those NGOs which are working for the welfare of women.

Distribution of Land to landless farmers

30. A major cause of poverty is that large number of farmers are landless, their wages are low and they work under harsh conditions. In order to ameliorate the conditions of the poor farmers the Prime Minister's Programme for distribution of land among landless tenants has been initiated. About 400,000 acres of land has been distributed to over 56,000 tenant families in the last year.

Shelter

31. Inadequate housing facilities are a major problem. According to a survey there is a backlog of 6.3 million housing units in the country. Not only these facilities are inadequate, most of the people live in huts and mud-houses where there are no electricity, water and other facilities. Our Government in its earlier tenure had promoted 3 and 7 marla housing schemes which had yielded positive results. In view of the seriousness of the problem the Prime Minister has recently announced a plan for the constructions of over 5,00,000 housing units for low income groups in the next two to three year. These will be given to the poor and deserving people on easy conditions. The plan will be implemented in collaboration with international and national construction companies in a transparent manner. I will discuss the tax concession proposed for this purpose later. Some of the facilities which are proposed to be extended include:-

(i) declaration of housing and construction as industry which will enable banks to offer project loans for housing sector;

(ii) free of cost availability of land by Government for houses for low income group which have very high market prices;

(iii) houses apartments will be non transferable for first five years from the date of occupation. Break of the condition will entail heavy penalty including imprisonment.

Employment

32. Unemployment is a major issue which has also become serious owing to slowing down of economic growth in the recent past. It is expected that accelerating economic and social growth would generate about 800,00 jobs opportunities next year. This will be supplemented by special programmes of employment generation. Under the Prime Minister's Agenda of National Development in July 1998 the PM's Programme of Self Employment was introduced. The Pakistani banks and the Small Business Finance Corporation have made special arrangements and allocated Rs.6.6 billion for loans for self employment and small business. These institutions have approved 31,600 loans applications of Rs.5.6 billion by April,1999.

33. The Small and Medium Enterprises Authority (SAMEDA) has been also set up under Prime Minister's guidance to help promote small and medium enterprises in collaboration with banks and financial institutions.

34. In order to ease the unemployment situation the Government have also decided to lift the ban on recruitment against existing posts.

Welfare of Workers

35. Workers, are the main asset of the society. The Government have taken a number of steps for their welfare, the main being the new Labour and Manpower Policy which was formulated in a tripartite Conference in January this year. The Policy is being given a final shape and will be launched shortly. We hope that the Policy will not only protect the rights of labour and promote their welfare but will also help fostering healthy and productive relations between employers and employees, thereby raising production and productivity.

Transparency

36. Our Government is following a transparency open and consultative policy. It is our endeavour to keep this august House and the people fully informed about our policies and actions which will not only promote understanding and trust but their feed back will enable us to make the policies more effective. You may recall that on 22nd of last January I had set a new tradition by laying the text of the agreement with IMF on the floor of the House. We are keeping the people fully informed about the economic policies and trends and I am holding press conference every month to review the latest economic situation. We have now decided to place the details of the current budget and all notifications and orders on the website of the Central Board of Revenue. I hope that this will contribute in developing an atmosphere of confidence,transparency and understanding of our policies and programmes.

Good Governance

37. Lack of good governance and deterioration in the efficiency of Government institutions is a serious issue. It is not only adversely affecting the execution of policies and programmes but also posing multiple difficulties to the people. The Government has therefore decided to give high priority to good governance and improvement in the working of government institutions. The Government is taking such steps as would result in positive changes in the attitude and performance of government employees and would transform them into responsible, concious, efficient and honest lot. Steps taken include effective accountability, liberalisation of policies, withdrawal of discretionary powers of officials, establishment of Khidmat Committees, recruitment on merit, and effective monitoring and implementation of policies and programmes.

Mr.Speaker

38. These policies are having desired results already. For instance we have introduced a transparent Textile Quota Policy. In the distribution of quotas, I as the Commerce Minister had withdrawn all discretionary powers. We have not allocated any quota on political or other considerations. Considering it as a trust we auctioned the quota through private sector in a transparent manner. In two and a half years the previous Government earned Rs 705 million from textile quota. With the grace of Almighty we earned Rs 3321 million during the same period. Similarly by making the system of import of wheat transparent the Government has saved $ 77 million (Rs 14 billion) over a period of two and a half years in freight.

National Security

39. In view of the global and regional situation it is essential that national defence capability should be strengthened and all necessary measures are taken to ensure balance of power in the region. Our Government gives high priority to national security and integrity and is prepared to provide all necessary means to our brave armed forces which have proved that they are capable of defending the homeland and ensuring its integrity. In view of the current situation an amount of Rs 142 billion has been provided for defence in the next budget.

Payment in foreign exchange

40. In order to earn foreign exchange it has been decided that all foreigners should pay their hotel bills in foreign exchange. This amount will be deposited by the management of hotel in the State Bank at inter-bank rates.In addition, the incoming passenger should pay duties on their accompanies and unaccompanies baggages in foreign exchange. In the future customs duty on cars will also be paid in foreign exchange. I will present its details later.

Revised budget Estimate 1998-99

41. I would now like to give a overview of the current years budget. As I have mentioned earlier, this year happens to be an unusual year in which the budget has also been adversely affected. Delay in availability of external resources and the state of uncertainty led to shortfall in revenues. Therefore we had to review the expenditure priorities. By the grace of Allah despite difficulties we have been to manage our finances well. You would be pleased to know that in the current year we have been able to bring down the overall fiscal deficit from the budget estimate of Rs.132.8 billion to the revised estimate of 101.4 billion, i.e. 3.4 percent of GDP against the target of 4.3 percent of GDP. It is also satisfactory to note that we have been able to persistently reduce the fiscal deficit from 6.3 percent in 1996-97 to 5.4 percent in 1997-98 and now to 3.4 percent in 1998-99. Insha Allah we continue to make further improvements on it.

Mr.Speaker

42. The revised estimates for 1998-99 has been as under:-

- Gross revenues received were originally estimated at Rs.518 billion while the revised estimate is Rs.502 billion. After taking out the share of provinces of Rs.122 billion the net receipt of the federal government are Rs.380 billion. Fall in revenues is mainly due to decline in tax receipt of CBR from Rs 355 billion to Rs 308 billion. Major decline has been in the customs duties which came down from the budget estimate of Rs 90.1 billion to the revised estimate of Rs 61.3 billion. This is mainly caused by fall in imports and rationalisation and reduction of customs duties from 45 percent to 35 percent. Slight increase in sale tax from budget estimate of Rs 71.5 billion to revised estimate of 72.6 billion is a positive development so far taxes are concerned.

43. A satisfactory development so far revenues are concerned is the substantial increase in surcharges from budget estimate of Rs.43.3 billion to revised estimate of Rs 73.2 billion.

44. The current expenditure has also declined from Rs 496 billion (BE) to Rs 478 billion (RE), a decline of Rs 18 billion. This reflects the success of the Government in economising on expenditure and performing its responsibilities efficiently.

45. In the current year the public sector development was originally estimated at Rs.110.5 billion but due to financial stringency the revised estimates is Rs 92.1 billion. While reducing the expenditure, the Social Action Programme and other essential projects have been protected.

46. To sum up, against the budget estimate of Rs 606.3 billion we have been able to keep the expenditure at Rs.570.3 billion. We have also been able to retire the borrowing from the banking system of Rs.62.8 billion as against the bank borrowing of Rs.39.2 billion envisaged in the budget 1998-99.

Budget Estimate 1999-2000

47. I would now like to present the overall position of the budget estimate for the next year. The position is as under:-

Resources (Billion Rs)

- Revenue Receipt (Net) 422.9

- Capital receipt (Net) 44.1

- Self financing of PSDP by provinces 3.9

- Bank borrowing (-) 13.7

- External Resources 185.0

Total Revenue 642.2

- Expenditure

                                            - Current Expenditure        525.9

                                            - Development Expenditure 116.3

                                                Total Expenditure         642.2

TAX PROPOSALS FOR NEXT YEAR

Mr. Speaker!

48. Now I come toward tax proposals for 1999-2000 and revamping of taxation system. Before going into detail I would like draw your attention towards the basic features of monetary and fiscal policies so that they could be viewed in their true prospective.

49. As you know that fiscal policy is and essential part of our economic policy. We believe that this policy is not meant only to collect taxes to meet government expenditures. We considered it as a means to achieve- socio economic development, self reliance, improvement of national revenues, equitable distribution of wealth and opportunity progress and as vehicle for providing momentum to private sector for its development.

50. Once a taxpayer -friendly fiscal environment has been created, the base of taxation can be broadened by way of voluntary compliance. However, a liberal tax culture needs a strong and effective enforcement to forestall possibilities of tax evasion. Our tax department will have to be alert to avoid the risk of alienating the people from tax system and the need to meet their responsibilities. The package would not be complete without proper taxpayer education, proficient tax collectors and a just policy of rewards and punishments.

51. Let me assure you, Sir, that the honest taxpayers and tax collectors will be duly honoured and rewarded while the tax offenders and corrupt tax officials will be given exemplary punishments.

52. Welfare of common man remains the first and foremost objective of the Government. However, the funds required for welfare projects will have to be generated from within for which the required support can come only from strong economy. Alive to this situation, the Government has launched the crash programme for revival of economy, simultaneously, alongwith welfare projects such as Prime Minister’s Urban Transport Strategies Plan and Housing Schemes. Such steep challenges cannot be met without participation of every citizen. It is hoped that the people will also rise to the occasion and strengthen the hands of the Government for fulfilment of these dreams by making their due contributions to the national exchequer.

53. While formulating the measures the following factors have been kept in view.

(i) These measures would be in conformity with our economic policies, especially the Trade Policy, Monetary Policy and Development policy.

(ii) These measures will support our socio-ecomic programmes, mentioned earlier.

(iii) These will broaden tax base by bringing new sectors and persons into tax net, and incidence of tax will be on the persons who have the capability to pay.

(iv) These measures would be easy to understand and implement and would promote tax culture by encouraging people to pay taxes. These will accelerate tax collection and promote self assessment these will be transparent and just and discourage corruption. Tariff system would be overhauled to rid the people of their daily problems in this regard.

(v) These will bring about a pleasant and positive change in the attitudes and improve relations between the taxpayers and tax collectors.

(vi) These will create such trend in tax culture that there would no need to impose new taxes in the future.

54. Mr. Speaker! Now I present the details of the proposals, formulated under new economic strategy.

Mr. Speaker, Sir!

55. With a view to introducing simplification in the taxation system, more classes of taxpayers are being relieved of the cumbersome and lengthy procedure of normal tax assessment. The scope of the Presumptive Tax Regime will now include Advertising Agents, Travel Agents, Insurance Agents, Indenting Agents and Petrol Pumps. These taxpayers will be filing a simplified one page statement and the tax withheld at source at the rate of 10% of commission receipts shall be the full and final liability of Income Tax.

56. On the directive of the Prime Minister, all previous schemes have been critically analyzed. Keeping in view the confidence we have reposed in our taxpayers, their genuine demand to have a simple, convenient and workable solution to the problems is now being met. The Government is introducing a new Universal Self Assessment Scheme with the following features:

i) Accepting the long standing demand of business community, the scheme shall no longer be restricted to individuals and registered firms. Now, private limited companies would also be able to benefit from Universal Simplified Assessment Scheme.

ii) This Scheme is voluntary and not compulsory.

iii) There would be no contact between the taxpayer and the tax collector.

iv) No case would be selected for total audit.

v) No documents would be filed by non-corporate taxpayers.

vi) The taxpayers would be able to get prior years determined refunds adjusted against tax payable under the new Scheme.

vii) The taxpayers would be able to make adhoc additions to their income which could be introduced in the Books of Accounts without payment of any further tax.

viii) Taxpayers may freely declare their true income, turnover, and gross profit/net profit without fear of any adverse inference which will accepted and no action will be taken on the basis of such declaration.

ix) A brief simple and easy one-page return form has been designed, which would itself become an assessment order, and the taxpayer would not have to visit any tax office to get his assessment certificates.

57. Tax rates under the universal scheme would be as under:

1. In case of individuals, AOPs, URFs and HUFs

2. In case of Registered Firms and Private Limited Companies.

Minimum increase in tax for 1999-2000 by at least 30% compared with the tax payable on the income declared or assessed in the preceding year.

58. While protecting honest taxpayers from the excesses of the system, we are, firmly committed to eliminate tax evasion. In cases of deliberate concealment of income, the return would fall outside the ambit of this Scheme and entail penalties under the law. However, to ensure full justice, no penal action shall be taken without prior approval of the Regional Commissioner and that too after a show cause notice and adequate opportunity of being heard to the taxpayer. Besides, as a matter of policy, such cases will be audited outside the circles of normal jurisdiction by other or Special Circles or may be out-sourced for audit.

59. Sir! Prime Minister’s Housing Programme for construction of 500,000 houses for poor and needy persons in Pakistan within the next 2-3 years is being launched with full fiscal and monetary support for social uplift and Economic Revival. This will not only cater to the housing needs of the common man but will also generate economic activity of more than 400 billion rupees annually and serve as a catalyst to revive about 40 housing related industries. In order to provide tax incentives and concessions, the Government has decided to give following tax reliefs:

i) Mark up on the loans invested in 5-6 marla (150 sq.yds.) houses or 1200 square feet apartments constructed under this Programme shall be deductible as an expense in the tax return of the individual concerned.

ii) Builders and developers will be charged presumptive income tax at the rate of one percent of the sale price of these houses/apartments. It would be deemed as final assessment.

iii) Local developers and investors will be treated at par with the international developers and investors.

iv) Capital Value Tax on immovable properties will be withdrawn.

v) The Provincial Governments, through their budgets, will reduce the rates of stamp duties, transfer fees, registration on fee and other charges which shall not be more than 5% (all inclusive).

vi) The existing sales tax on cement blocks, bricks and concrete will be removed.

vii) No Wealth-tax shall be charged for five years on the value of these houses and apartments.

viii) Import duties will not be levied on Construction Machinery, Precast Plant, Ready Mix Concrete Plant, Block Manufacturing Plant for one year upto 30^th June, 2000.

60. Sir, as we all know, our common man in the urban centers is facing lot of hardship because of acute shortage of transport facilities. The Prime Minister's Urban Transport Strategy has been evolved to encourage investment in the Transport Sector for the benefit of the common man. In order to augment this noble cause, following tax incentives are being introduced:-

(i) Bus operating companies established under the Scheme will be allowed depreciation (First Year Allowance) at 100% cost of the buses which will continue to ply in the urban areas.

(ii) The sources of funds invested in the equity of the operating companies will not be questioned by the tax authorities.

(iii) Capital Value Tax will not be charged on the motor vehicles imported under this Scheme.

(iv) Exemption from whole of customs duty will be provided to the CKD kits for buses & cars, CBU Diesel Buses and Chassis, CNG CBU buses and chassis and plant & machinery imported for assembly of diesel and CNG buses and bus body building.

(v) Under the Scheme individuals may import one bus through non-repatriable investment on payment of 10% duty.

61. Sir, the Government places great reliance on the export sector to improve the balance of trade. The following measures are being introduced to encourage exporters.

i) The Presumptive Tax Regime applicable to direct exporters of goods will be extended to indirect exporters opening back to back LCs. They will be taxed at the same final tax rates of 0.5%, 0.75% or 1% as are applicable to all other direct exporters of goods.

ii) To facilitate the export effort the persons providing services to manufacturers-cum-exporters and to the indirect exporters would be exempt from tax withholding.

62. Sir, the Government is also continuing to rationalize the tax system in order to remove anomalies so that the system is fair, just and equitable. In this regard, following measures are proposed:-

i) As a further incentive, the taxpayers enrolled under the Sales Tax `Turnover Schemes' would pay only 1% of declared turnover as Presumptive Income Tax. The immunity from reopening of Income Tax assessments on the basis of information from Sales Tax records is being extended upto 2001-2002 instead of the present 1999-2000.

ii) The unification of foreign exchange rates may result in windfall gains to importers. In order to bring stability in wheat prices and to discourage profiteering due to forex measures, such windfall gains to wheat importers would be taxed.

iii) At present, perquisites of employees drawing salary above Rs. 300,000 are being taxed lightly at a reduced rate. Thus, a person enjoying higher emoluments suitably couched in salary and perquisites pays less tax than a person drawing salary with no or little perquisites. It is, therefore, proposed that perquisites and salary may be taxed at similar rates. This measure would not affect the lower category of salaried employees.

iv) The anomaly in the personal Income Tax rates as compared to the tax rates applicable to the companies and firms has created a disincentive for corporatization and organized businesses. In order to remove the distortion, the personal Income Tax rates are being rationalized by adding three income brackets and rate slabs of 25%, 30% and 35% for higher incomes of Rs. 500,001 to Rs. 700,000 from Rs. 700,001 to Rs. 1,000,000 and income exceeding Rs. 1,000,000. However, the existing taxpayers whose income is below rupees 5 lakh would pay tax at the existing rates.

v) In order to protect the small shareholders, it is proposed that companies not declaring dividends but creating excess reserves will pay tax @10% of the amount of reserves exceeding 50% of their paid up capital.

vi) There is sizable increase in prizes of reffles/lotteries. The present rate of tax @ 7.5% is therefore proposed to be raised to 10% on all categories of prize winnings.

vii) It is proposed that the previous limit of income for compulsory filing of wealth tax return at Rs.100,000 be raised to Rs.200,000.

63. Broadening of tax base is yet another need of the day so that tax contribution is shared by more people and the quantum of much needed revenue increases. In order to expand the capability of the Government to broaden the tax base, it has been proposed to involve agencies outside the Tax Department to detect and enroll new Income Tax and Wealth Tax assessees. This out-sourcing of survey work would also help in tracing out the persons not availing the benefits of the most liberalized Universal Self Assessment Scheme.

64. There is also the need to develop a strategy for an efficient Management Information System with the objective of broadening the tax base, enhancing tax collection and controlling revenue leakages. It is in this context that a Scheme of Common Taxpayer Identifier (CTI) is now being introduced to integrate all Federal Taxes through a unique and permanent identification number, allocated to every common taxpayer, which will facilitate cross matching of information, detecting non-filers of tax returns, identifying delinquent accounts and creating better coordination and linkages between parallel tax data bases.

65. We believe that the major cause for inadequate collection of direct taxes is the absence of tax culture in the society in general and lack of motivation for the law-abiding taxpayers in particular. There is no denying the fact that inculcation of healthy tax culture is essential for the growth of revenues but those individuals who contribute significantly to the national exchequer also deserve to be honoured & recognized. We propose to make a headway in that direction by adopting meaningful measures such as grant of "Best Taxpayers Trophy" to top 20 individual taxpayers, consideration of their names for "Civil Award" and their representation on the advisory and consultative bodies of the Federal Government.

66. Sir, although federal tax receipts have been showing yearly increase, the revenue growth rate has declined sharply in the last 5 years. This Government has a firm resolve to bring about a dramatic improvement in the economic performance for which a quantum jump in resource mobilization is very essential. This is possible only if a major effort is made to revamp and restructure the CBR. With this objective in view, the Prime Minister had set up a committee for the Restructuring of CBR. The committee completed its task and based on the legislation introduce in this august House, the Pakistan Revenue Authority is proposed to be created in place of CBR. The Authority would be given an autonomous status with well defined goals, performance indicators, training needs and financial autonomy so as to achieve maximum operational effectiveness. The restructuring of CBR will also include improvement in the appellate systems so as to ensure speedy redress of taxpayers grievances from within the system.

67. We are conscious of the fact that genuine taxpayers are not always able to seek administrative remedy in respect of their legitimate complaints against tax functionaries. We, therefore, intend to set up a high-powered institution of the Federal Tax Ombudsman. He will have exclusive jurisdiction to entertain complaints of aggrieved taxpayers and investigate the allegations of mal-administration on the part of Central Board of Revenue or any of its employees. He will also have the authority to recommend criminal or disciplinary proceedings against the guilty persons on the basis of findings.

68. At present there is variation in the amounts of fees payable for filing appeals against assessment orders. It is, therefore proposed that to rationalize and harmonize the appeal fees be fixed at Rs.1000/- or 10% of the tax levied whichever is the less.

SALES TAX

Mr. Speaker!

69. It gives me immense pleasure to announce before this august House that the Government policy of broad-basing the Sales Tax has been an astounding success. Despite the adverse economic factors, the sales tax collection registered an impressive growth of 37% in gross revenues and 34% in net revenues during the 11 months of this year. This was achieved through intensified audit, enforcement measures, recovery of arrears, registration campaign and improved administration. Moreover, during the said 11 months of this year, an amount of Rs:19.5 billion was refunded as against the refund of Rs:13.3 billion during the corresponding period of last year, showing an increase of 47%. The performance is conspicuously reflected in Sales Tax/GDP ratio which increased from 1.8% in 1997-98 to commendable ratio of 2.35% during 1998-99.

70. Now that a considerable progress has been made towards VAT-mode of sales tax system, I am pleased to announce a package of relief measures for small entrepreneurs:-

(i) For small manufacturers, the exemption limit is proposed to be enhanced from annual turnover of Rs:0.3 million to Rs:0.5 million while this limit shall be Rs:1 million in case of retailers.

(ii) For turnover tax scheme, the limit in case of manufacturers has been raised from annual turnover of Rs:1 million to Rs:2.5 million while for retailers, the scheme will apply to those having annual turnover of Rs:1 million to Rs:5 million. This shall provide substantial relief to small taxpayers.

71. Mr.Speaker! The agriculture sector is the backbone of our economy and is very dear to us. As you know, Fertilizers and pesticides were already exempt from sales tax. Now we are also exempting major inputs like phosphoric acid and phosphatic rocks used for local manufacturing of DAP and phosphatic fertilizer. Cattle feed is also proposed to be exempted from sales tax to encourage the cattle and dairy farm industry.

72. The Government had announced an Amnesty Scheme to induce tax defaulters to pay principal amounts of sales tax and avail of waiver from additional tax, penalties and prosecutions relating to that principal amount. An amount of Rs:1 billion has been paid under this Scheme. In view of the demands from various Chambers and Associations, I am allowing this facility now for the last time for a limited period upto 28th June, 1999, with the waiver of four-fifth of the additional tax and penalties. Severe action, shall be resorted to against persons not availing of this Amnesty Scheme.

73. Mr.Speaker Sir! Sales Tax Law is also proposed to be extended to Northern Areas and Tribal Areas. To discourage non-registration and to provide incentive and advantage to the registered persons, the rate of 1% further tax on supply of taxable goods to non-registered persons is also proposed to be raised to 3%. This will help the honest and registered taxpayers. Immunity from reopening of income tax assessment on the basis of sales tax turnover is proposed to be extended upto the year 2001-02. New registrants shall also be allowed input tax credit on the stocks of taxable goods held by them.

CENTRAL EXCISE

Mr. Speaker!

74. The Govt. is following a conscious policy of reposing greater confidence in the tax payers. In pursuance of this policy, certain administrative measures are contemplated. It is proposed that items such as light speed diesel oil, petroleum wax, plastic products, sugar and M.M yarn which are presently under the supervised clearance system may be provided the facility of self clearance system. With this shift, only four commodities of central excise regime will remain subject to supervised clearance system.

(i) Excise duty on polypropylene bags and sacks is proposed to be withdrawn this year.

(ii) Historically, the world over, excises are used to reduce conspicuous consumption. Cigarettes smoking is a known health hazard. It is, therefore, necessary to discourage smoking. To achieve this objective, it is proposed to increase rate of excise duty on cigarettes having retail price of upto Rs. 4.25 per 10 cigarettes to Rs. 2.00 per 10 cigarettes. Central excise duty rate on cigarettes with retail price in excess of Rs. 4.25 per 10 cigarettes is proposed to 70% of the retail price.

(iii) With a view to providing protection to local industry it is proposed to levy central excise duty in addition to customs duty and sales tax on certain commodities at import stage including among others cement, shampoos in retail packing, detergent powder and L.P.G Cylinders.

(iv) Users of credit cards are capable of contributing to the national exchequer. It is, as such proposed to levy central excise duty at a nominal rate of 2% on billed amount of credit cards. It is also proposed to increase rate of excise duty on bank cheques and travel cheques from Rs. 2.00 to Rs. 4.00 per cheque.

(v) It is also proposed to increase rate of excise duty on bank cheque s and travel cheques from Rs.2.00 to Rs.4.00 per cheque.

(vi) At present advertisement on Radio and T.V are liable to central excise duty. However, advertisements appearing in the print media are exempt from excise duty. With a view to bringing uniformity, it is proposed to levy central excise duty on advertisements appearing in newspapers, Journals and periodicals at the rate of 12.5% of the charges.

CUSTOMS:

Mr. Speaker!

75. Right from the beginning this government resolved to correct the macro economic imbalances. A reform process was initiated whereby dependence on revenue from customs duty and taxes was gradually reduced by initiating a systematic and well staggered programme of tariff reforms. Initially through the Economic Revival Package of March 28, 1997 the highest tariff rate was reduced to 45%. Thereafter, in March, 1999 the highest rate was further reduced to 35% and the tariff slabs were also reduced from five to four. Simultaneously, lower than 35% rates, wherever, possible were cascaded (reduced). Resultantly, with effect from March 31, 1999 the rates on 3239 tariff lines i.e, on 6,500 items got reduced to the extent of 10%. This initiative of the government would not only reduce the profit margin of smuggling activity but also that of tax evasion. Furthermore, Pakistan's exports would become more competitive and local manufacturing base more efficient.

Mr. Speaker Sir!

76. To facilitate the tax payers in general and the overseas Pakistanis in particular, it has been specially decided to change the current system of assessment of vehicles altogether and discretionary powers of the assessing officers in this regard be withdrawn. A new easy scheme for a specific and single levy of customs duty is being introduced. This levy shall have to be paid only in foreign exchange as per the following rates:-

Vehicles, Customs duty in US Dollars

the Engine Vehicles Vehicles

capacity other than 4x4

of which is: 4x4

Upto 800CC 5,000 5,000

From 801CC to 1000CC 10,000 10,000

From 1001CC to 1300CC 15,000 15,000

From 1301CC to 1600CC 20,000 20,000

From 1601CC to 1900CC 32,000 25,000

From 1901CC to 2300CC 55,000 30,000

From 2301CC to 2800CC 80,000 40,000

From 2801CC to 3500CC 120,000 50,000

From 3501CC to 4200CC 150,000 60,000

More than 4200CC 175,000 70,000

In this scheme all the other taxes for example sales tax, income tax and CVT are being abolished.

77. The owners of all those old and used Buses, Trucks, Tankers, Dumpers and Tractors etc which are plying without payment of customs duty and other govt taxes are being given a facility/immunity to pay special discounted rates of duty upto 31st August, 1999. A strict penal action shall be initiated w.e.f. 1st September, 1999 against all those vehicles which would still be non-duty paid.

78. The range of customs duty on import of buses and coaches is 35% to 60%. To facilitate the public and to reduce pressure on existing transport system, it has been decided that on all vehicles designed to transport more than 10 persons the new rate of duty would be 25%. With this decision good quality public transport would be made available at affordable rates. Moreover, one bus per one person is being allowed import at the rate of 10% under NRI Scheme.

Sir,

79. The details of all those tariff anomalies which have been removed in this budget are available in the budget documents.

80. The rate of duty on 67 smuggling prone items have been reduced over a span of last four to five years. This has yielded good results. The legal import volume of these items has registered a growth. Therefore, this year the rates of duty on following more such goods attracting the rates of 20% to 35% are being reduced to 10%.:-

a) Photographic film rolls.

b) Photographic papers.

c) Close circuit T.V Cameras.

d) Video Cameras.

e) Chemicals for photographs

f) Optical Filters.

Mr. Speaker Sir!

81. In the end it is important to mention that in order to make the customs tariff more simple certain items which are classified under different headings and assessed at different rates are now being subject to one rate in order to obviate any disputes or connivance.

82. In this budget certain legal provisions have also been improved in order to remove bottle necks hampering effective recovery of customs duty arrears and to discourage revenue leakage.

PROVINCIAL PROFESSIONS TAX

83. At present, Professions Tax is being collected by the provinces at very low rates which needed revision since long. Such revision, according to Article 163 of the Constitution of Pakistan, is subject to approval by the Parliament. Government of Punjab, in order to raise the limit in the rates of Professions Tax, approached the Federal Government for raising limit of tax from Rs.50 to Rs.5 million through an amendment in the Professions Tax Limitation Act, 1941. However, after a through examination, it was decided to raise the ceiling for Professions Tax from Rs.50 (rupees fifty) to Rs.50,000 (rupees fifty thousand only). This enhancement will be applicable to all the provinces and will bring a substantial increase in their revenues.

Mr.Speaker

84. After the taxation proposals, I would like to present some inmportant and far reaching measures.

Multiplicity of Taxes

85. The industrial and business undertakings pay a whole range of levies under various federal and provincial labour laws. These include contributions under Employees Old-Age Benefit Act, Workers Welfare Fund Ordinance, Companies Profit (Workers Participation) Act, Employees Social Security Ordinance, Mineral Labour Welfare Act and Workers Children's (Education) Ordinance. These laws are enforced by various agencies in an un-organized and un-coordinated manner which is irksome for the tax payers. It is therefore proposed to set up a task force under a retired judge of the Supreme Court to review the working of labour related all federal and provincial departments, identify the difficulties of the tax payers and consider the possibility of introducing one window approach and unifying the laws. The task force will submit its recommendations within six months.

Poverty Alleviation Fund

Mr.Speaker

86. You must have noticed that most of our efforts in the economic and social fields are aimed at alleviating poverty and eradication of backwardness.

87. The Alleviation of Poverty is one of the key elements of the Manefesto of the Pakistan Muslim League. A major step in this direction is the etablishment of the Pakistan Poverty Alleviation Fund which will support the non-governmental and community organizations in eradicating poverty. The purpose of this Fund is not promote loan defaulters or beggers but to impart training and skills to the poor and provide them resources to stand on their own feet, thereby ensure their prosperity.

Perks of officers of public enterprises

88. Directors appointed by Government on public sector institutions and their retired officials are being given exorbilant perks and privileges (like allotment of plot to trustees of KPT, free telephone facility to serving and retired directors of PTC, free travel facility to the present and former directors of PIA, etc). It has been decided that all public sector enterprises should review for withdrawal any exorbitant perks allowed to their serving employees which are not commensurate with their jobs. Likewise they should withdraw any perks from retired officials which are beyond the scope of normal reirement benefits.

Excise Duty on Telephone

89. Telephone has become a common necessity. The promotion of information technology has also enhanced the use of telecommunications. To provide relief to the consumers it is proposed to reduce the excise duty on telephone from 25 percent to 15 percent.

Relief to widows

90. In pursuance of Prime Minister's announcement yesterday, instructions have been issued for writing off the loan and profits against widows immediately.

Radio Licence

91. For poor farmers and workers and people residing in remote areas radio is a companion and source of entertainment and information. In order to provide relief to them it has been decided to withdraw the radio license fee wit effect from July 1,1999.

Tax payers directory

92. There has been a longstanding demand from the general public for the disclosure of information on income and wealth taxes paid by the public representatives and senior officials. In the past the vested lobbies, have however, thwarted this demand on one pretext or the other. In accordance with the announcement in the Senate a few weeks back, the Government has now decided to suitably amend the income tax and wealth tax laws to enable it to publish directories of income and wealth taxes paid by of public representatives including Senators, MNAs,MPAs, federal and provincial advisors and special assistant and senior government servants(BPS 20,21 & 22). This action is a part of the steps tat Government is undertaking for good and transparent governance. The first directory for the current year ending June 30,1999 will be published by December 31,1999. Necessary amendment is being made in the Income Tax and Wealth tax laws for this purpose.

Levies of local bodies

93. Tax payers have been agitating against multiplicity of taxes and levies. People, businessman and industrialists have to pay multiple federal,provincial and local taxes and levies and they are being harassed at every step. The zila tax, export tax and octroi have made the life of the people miserable. They are faced with over 570 institutions (including metropolitan corporations, municipal corporations, municipal committees, town committees and district councils) collecting zila and export tax and octroi at thousands of places, Every one hears the stories of extortions and corruptions. The contractors are collecting much more taxes that what is being paid to Government. To relieve the public from this regressive tax it has been decided to withdraw all such taxes from July 1,1999. In order to facilitate the normal working of these local bodies, the Federal and Provincial Governments will provide Rs.19.5 billion to them, in which the share of Federal Government will be over Rs.13 billion.

Mr.Speaker

94. This is a big concession for the business and industrial community. It is therefore logical to expect that they would meet their responsibility by paying the national taxes honestly so that the national needs are met more effectively.

Pay and Pension

95. The Government is aware of the plight of its employees due to rising prices. It is particularly so since the pay of government employees has not been raised since 1994 and their allowances since 1991. The position of pensioners is worse as their pensions have not been revised for a much longer period.

96. Mr.Speaker I am very pleased to announce that the Government has decided to grant to Government employees special additional allowance from July 1,1999 on this basis:-

                                        (i) BPS 1-16 25 % of basic pay.

(ii) BPS 17-22 20 % of basic pay.

97. The pension of the retired officials will also be raised by these additional rates. The special additional allowance will be exempt from income tax.

Mr.Speaker

98. With the grace and mercy of Allah, the attention of the Prime Minister Mohammad Nawaz Sharif and his Government is focussed on the problems of the poor and low income groups who are looking for jobs, who are running in hospitals for medicine, who are forced to send their children to work as they are unable to afford the school fee and books, who are willing to sacrifice everything for their home land but are unable to get a respectable earning, and, who devote their entire life in the service of the country but are unable to have a peaceful retired life. In presenting this budget today we fully realise that it is not for levying taxes on the helpless people but for providing opportunity for employment, education and health for all. We realise that a budget which makes rich richer and poor poorer is not a budget worth presenting in a respectable House. If our economic policies do not provide any facility or happiness to those who have brought us in this august House,then it is merely a bundle meaningless figures. I hope that in this budget the people will see a reflection of this thinking.

Mr.Speaker

99. The facts and figures, targets and objectives of the budget are before you. Every moment of the current year is a witness of the fact that Pakistani nation is capable of facing every challenge boldly. They can turn the tides with their courage and determination and salvage the national economy. The untiring leadership of Prime Minister Mohammad Nawaz Sharif has inculcated a new desire in people to march forward. We have to turn Pakistan from an atomic power to en economic power. For this we all have to work hard. Our women, our businessman, our workers, our peasants and our youth have to work in unison for the glory and prosperity of the country. Those among us who are blessed by Allah with abybdabt resources should realise that all this is on account of this homeland and they are duty bound to use them in the service of the country. They should pay their taxes faithfully so that we are not forced to look to others. One should remember that if we donot pay our dues, the nation will not get rid of the debt trap. Anyone who is not prepared to pay his taxes fully is not faithful to the motherland. May Allah guide all of us to strengthen the bonds of amity and determination to serve the nation.

Pakistan Painda Bad

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