Everyone has to come into the tax net: finance minister
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“Everyone has to come into the [tax] net,” said Finance Minister Muhammad Aurangzeb hours after he delivered a speech announcing the country’s budget for the coming fiscal year.
“The reality is that a 9.5 per cent tax-to-GDP ratio will not run a country,” he added.
The minister presented his first federal budget with a total outlay of Rs18.9 trillion, which analysts say is broadly “in line with IMF guidelines” in order to secure another bailout.
Speaking on Geo News programme ‘Aaj Shahzeb Khanzada Kay Saath’, Aurangzeb said that the budget was made to improve the country’s tax-to-GDP ratio and was largely in line with what was discussed with the visiting IMF mission.
He emphasised that the government was focusing on broadening the tax net rather than solely taxing certain sectors. “If the salaried class’s incomes are cut at the source, then they are already dealing with the FBR,” he said.
“People are afraid to come into the net because they fear harassment. If we remove the human element at the FBR — which we are aiming to do through digitisation — we will create trust,” he added.
The minister said that the government cannot focus only on sectors where revenue is easiest to collect, adding, “If we do not expand our ambition and the tax net then that is not an answer that will lead us to sustainability.” Thus, he said, the government is working to protect the salaried class.
“We are protecting health, education, agriculture and the salaried class. I want to be absolutely clear,” he stated. “We have not touched the maximum slab. There has been change in other slabs, but it won’t be a meaningful change.
“The unsalaried class slab has been moved by 45pc. We have to move in a direction where everyone has to contribute, which is why we’ve taken punitive measures with non-filers.”
Elaborating on non-filers, Aurangzeb said that he does not understand the concept, adding that Pakistan is the only country “where such a category exists”. “We have taken a step in the right direction to not only make this a revenue-generating measure but to also get more people to pay tax,” he clarified.
Aurangzeb added that this past fiscal year, “We had a budgeted number of Rs9.4 trillion”. He added that there may be some shortfall, but maintained that “we’re largely going to get there”.
