ISLAMABAD, May 4: The Chairman, Central Board of Revenue (CBR) M. Abdullah Yousuf on Wednesday said the government was considering a host of measures in the next budget aimed at increasing exports and attracting foreign direct investment. He was speaking at a pre-budget seminar organized by the Institute of Chartered Accountants of Pakistan. Other speakers included CBR member direct taxes Salman Nabi, former president of Islamabad Chambers of Commerce and Industry (ICCI) Mohsin Khalid, chartered accountants Syed Shabbar Zaidi and Khalid Majid.
Mr Abdullah said that the CBR was studying various proposals to be considered in the budget for the year 2005-06 to enhance export. He said previously governments used to focus on imports substitution, which according to him did not work well.
The chairman said achieving the $14 billion export target for the current fiscal year was just a ‘peanut’. He said that it should be doubled in the next few years.
He said that tax-to-GDP ratio was around 9.5 per cent, which was the lowest in the region. He said it was needed to bring all potential taxpayers in the tax net.
Agriculture constitutes 25pc of the Pakistan economy and was largely outside the tax net. Services sector was 50pc of the economy of which wholesalers and retailers constitute 16pc but their contribution in the tax was only 2pc.
Transport and storage was 12 per cent of the GDP but their contribution to tax was only one per cent. Manufacturing sector was 18 per cent and was the biggest contributors of 50 per cent of tax.
Replying to a question, the chairman said that Pakistan heavily depended on the revenue collection therefore any further cut in taxes would create fiscal problems for the country.
He said unfortunately the tax paying culture in Pakistan was very poor as compared to other developed countries.
The chairman said that qualitative measures and competitive price of commodities would help Pakistani products to compete in the international market.
