Budget 2021-21: Here's what you need to know about customs and indirect tax exemptionsArchive
Minister for Industries Hammad Azhar presented the budget for fiscal year 2020-21 on the floor of the National Assembly on Friday amid slogans and desk-thumping by opposition members.
Azhar said the government was going ahead with an “expansionary fiscal policy” which was the need of the hour after the economy had contracted due to the coronavirus pandemic in the outgoing fiscal year.
An expansionary fiscal policy means the government is trying to use economic tools to increase spending by individuals and businesses. This can be done in a host of ways such as by cutting taxes so that households and businesses have more disposable income at hand or by reducing interest rates in an attempt to discourage saving or both.
As the minister pointed out, the government has reduced interest rates significantly since the onset of the coronavirus, from 13.25 per cent to 8pc in a span of three months. With the budget, the government was facing a catch 22 — on the one hand it wants to achieve higher tax revenue but on the other, it wants to boost disposable incomes.
To this end, we list some of the tax/duty exemptions and reductions introduced by the government in budget 2020- 21.
Raw materials for the following industries have been exempted from customs duty, which will make them completely duty free. The industries include: