ISLAMABAD: Minister of State for Revenue Hammad Azhar on Thursday explained that of the total Rs1.5 trillion increase in tax target for the next fiscal year, the government has introduced additional taxes worth Rs516 billion.
The remaining amount will be collected through withdrawal of subsidies, rationalisation of exemptions and revival of taxes that were not collected due to different reasons in the past, he said while speaking in the National Assembly.
The government has set an ambitious revenue collection target of Rs5.5 trillion for the upcoming fiscal year.
He informed the assembly about the steps taken by the government to broaden tax base including the integration of data on around 55 million individuals with the Federal Board of Revenue (FBR) database in the 10 months. He said the data will be accessible on Nadra and FBR portals.
Moreover, he said the benami rules were also implemented and the government has successfully secured data of around 152,000 offshore accounts under Organisation for Economic Cooperation Development (OECD) agreement.
He said the valuation rates for property were also rationalised to bring them in line with the market rates.
Shortcomings in the Customs Department were removed to overcome the problem of undervaluation and overvaluation.
He said under the free trade agreement, FBR was getting real-time data for exports from China — Pakistan’s biggest trading partner.
Azhar said the government is also moving away from collection of withholding taxes and had reduced duties and taxes on thousands of industrial inputs.
He added that in the budget for upcoming fiscal year, duties were either abolished or reduced to three per cent on 1,650 industrial inputs.
The minister pointed out that FBR had failed to achieve the desired results from reforms in 2011-13, however, this time around the revenue authority would again undertake a revamping project with the help of $400 million from the World Bank and benchmarks with tangible performance-based targets.
He said the accurate figure for internal and external borrowings in the year was Rs2.4tr. He said the government has also reduced the current account deficit by 30pc.
He added that the government had taken away powers from FBR to attach accounts and withdraw millions of rupees from taxpayers besides it was also stripped of authority to raid houses and businesses without permission from their top officer.
Data integration of the FBR, implementation of benami rules, information on OECD offshore accounts and improved market evaluation would help collect taxes, he added.
He said the sales tax on sugar was increased from 11pc to 17pc which would result in an increase of Rs3.5 per kg price of one sugar bag.
On ending the distinction between filer and non-filer on transactions of more than Rs5m for purchases property, he said the government took the step to create a better environment for industries and businesses.
Azhar said the market exchange rate did not mean free float as the government would keep a vigilant eye on market fundamentals and would not allow depletion of reserves below a certain level.
The minister said that many road projects would be undertaken in South Punjab including Indus Highway connecting Rajanpur and Dera Ghazi Khan and M. M. Alam Road connecting eight districts from Multan and Bahawalpur to Lodhran.
He explained that it was wrong to say that the education budget was reduced as development expenditure of Higher Education Commission was hiked by 35pc and Rs14bn were allocated for knowledge economy, data connectivity and information technology in research institutes and universities.
He pointed out that the previous government gave a figure of Rs11bn on paper for health projects without conducting any feasibility as they only handed over Rs6bn to provinces for immunisation programme and federal health programme was increased from Rs Rs8bn to Rs13bn.
He said that it was good that Sindh collected Rs100bn in taxes, while pointing out that it was relatively easy for Sindh to collect such numbers as it had port and headquarters of banks and insurance companies.
Member NA Khurram Dastgir said the devaluation of Pakistani rupee had shaken the confidence of businesses and markets.
Even after devaluation, the country’s exports were slowing down and would adversely affect imports of machinery and prices of fertilisers and petroleum products, he added.
Published in Dawn, June 28th, 2019