KARCHI, June 25: Finance Minister Abdul Hafeez Sheikh said on Saturday that within next two years, the excise duty and other surcharges would be totally abolished and the federal government would only be collecting income and sales tax.
Speaking at a seminar “Federal Tax Ombudsman Performance Study Launch, organised by the Transparency International (Pakistan), the finance minister said that over-lapping of a number of taxes was not only causing corruption and wastage of energy, but also giving negative return.
He assured that the government wants to be equitable in tax collection for which it has already included agriculture inputs under tax net and also removed zero-rating on textile to return to original mode of sales tax.
The finance minister admitted that Pakistan has a historic failure in improving its tax-to-GDP ratio and this was all because “we as a nation do not want to pay tax.”
He asked the audience that if taxes are not paid, how development could take place, particularly when we need roads, bridges, schools and many other services, like health, railways, etc.
He said that all these challenges could not be surmounted on borrowed money and it is our national duty to realise such facts.
Similarly, he said corruption is another issue which has to be tackled, but first of all there is a greater need to reduce and cut the size of government, particularly when there is federal government, provincial, district, Fata, Pata, Gilgit Baltistan, etc.
Citing an example, the minister said that when first Musharraf government came, there were only 18 federal ministers, but during his second government tenure there were as many as 78 ministers.
He stressed the need to strengthen institutions and allow them to work independently, and felt that presently several institutions, like Federal Tax Ombudsman and Transparency International (Pakistan) along with independent judiciary, SECP, Competition Commission and above all the Parliament are working independently.
He said nations transform by building their institutions and for making institutions it was necessary that people with integrity should come forward and take a lead.
He assured that the government is determined to go after those people who have amassed wealth but are not paying a single penny.
Dr Hafeez said that notices to around 78,000 have already been served after collecting their data and finalising their profile.Most of these people, he said had been frequently traveling abroad and have big bank accounts.
He further disclosed that a demand has been already raised against 10,000 such tax- evaders.
The Federal Board of Revenue (FBR), he said last year paid Rs14 billion towards refund to 12,000 taxpayers and this year around Rs40 billion had been paid to 45,000 exporters.
All these payments, the minister said had been made without harassment and were delivered to exporters without allowing illegal gratifications. The corruption is an issue, he said which needs cooperation and involvement of citizens and society as a whole.
He appreciated the performance of the FTO office and said such institutions are hope for the future of the country and all was not so bad as being generally stated day in and day out.
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