PTI government to launch yet another incentive scheme for higher growth rates
*ISLAMABAD - The Pakistani government is launching yet another incentive scheme for higher growth rates in targeted sectors.*
*Government will offer commercial and microfinance banks tax benefits on income they earn from one of its priority areas, reveals a policy document on the National Financial Inclusion Strategy for the next five years.*
Financial institutions will be charged 20% in tax instead of the higher current rate of 34% if they give loans to encourage growth in these priority sectors: agriculture (small farmers), small-and-medium enterprises, and low-cost housing.
Commercial banks have been severely criticized for heavily investing in government securities instead of offering loans to the private sector, which helps an economy grow.
To achieve sustainable and inclusive economic growth, access to finance is considered critical, the government says. For its five-year term, the government has set a target of Rs1800 billion in agriculture loans. The government plans to include loans to 700,000 SMEs to ensure the sector constitutes 17% of total credit to the private sector.