ISLAMABAD: Finance Minister Muhammad Aurangzeb has expressed dissatisfaction with three provinces’ delay in passing new agriculture income tax laws. This new legislation is one of the conditions agreed upon with the International Monetary Fund as part of the 37-month $7 billion Extended Fund Facility.

The finance minister reviewed several tax initiatives during the National Tax Council (NTC) meeting on Wednesday, which was held after an 18-month break. The minister also asked the finance ministry to host NTC meetings every three months to assess progress on different tax policies.

According to an official source who attended the meeting, the finance minister expressed dissatisfaction with the poor pace of passing agricultural income tax laws by Sindh, Khyber Pakhtunkhwa, and Balochistan. The meeting was informed that the KP government had approved the bill, but it had yet to be tabled before the assembly.

However, no information was presented at the meeting regarding whether the Sindh or Balochistan cabinets had passed the agri-income tax bill. Given the poor pace, the finance minister has chosen to raise the issue with Sindh Chief Minister Murad Ali Shah. Punjab is the only province that has enacted the bill through the provincial assembly.

Aurangzeb says govt will not revert to directed lending to housing sector

The Federal Board of Revenue (FBR) has only consented to disclose information about taxpayers who have reported their agricultural incomes in their tax returns. However, the FBR is reluctant to disclose further information with provinces since present legislation protects taxpayers’ confidentiality.

An official announcement issued after the meeting said the NTC meeting brought together key federal and provincial stakeholders to discuss critical matters related to tax reforms and harmonisation.

The meeting was held in the context of the recently signed National Fiscal Pact between the federation and the provinces, emphasising the need to realise the full tax potential from under-taxed sectors, particularly real estate, property, and agricultural income.

The meeting agenda focused on fostering collaboration between federal and provincial authorities to enhance tax systems, improve compliance, and boost revenue collection. The key discussions revolved around strengthening information-sharing mechanisms between FBR and provincial revenue authorities, leveraging advanced tools for data analysis, and implementing digital solutions to streamline tax collection.

It was also agreed to advance efforts to harmonise the General Sales Tax (GST) across provinces and transition to a unified tax portal for better efficiency and transparency. The meeting also focused on a single portal, harmonisation of tax rates and an agreed list of taxable services.

Incentivising housing loans

Meanwhile, the finance minister said that the government would not revert to directed lending to the housing sector and urged for creating incentivisation to facilitate bank-led financing to make it accessible to the public, the APP reported.

“We will not go back to directed lending, which was wrong thing to do. It creates distortions and has implications for the medium term, the minister said while speaking at the International Affordable, Green and Resilient Housing Conference.

To promote housing finance, the government will instead focus on creating incentivisation mechanisms, he added. This approach will encourage banks and microfinance institutions to take the lead in providing housing finance, making it easier for people to access.

The minister said the country’s housing sector was linked to two existential problems — population growth and climate change. With a population growing at an alarming rate of 2.5pc, the minister said, it had far-reaching consequences, including child stunting, poverty, poor learning outcomes, and a significant number of girls being out of school.

SOEs’ boards reconstituted

Meanwhile, the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Mr Aurangzeb, approved different summaries, including the reconstitution of the board of directors for Printing Corporation of Pakistan (PCP), Pakistan Railways (PR) and Overseas Pakistanis Foundation (OPF).

Published in Dawn, December 5th, 2024