KARACHI, Jan 20: Expressing the determination to continue the reformist economic and fiscal policy, Prime Minister Shaukat Aziz has attributed the 27 per cent increase in revenue collection to reduced tax rates, buoyancy in the economy and simplification of procedures.
A total of Rs410 billion was collected in the first six months of the current fiscal year as against Rs323 billion during the same period of the previous fiscal, he said while speaking at the Convocation 2007 of the Institute of Business Administration (IBA) Karachi at its city campus on Saturday, he said that.
Governor Sindh Dr Ishratul Ebad Khan who is also the patron of IBA and Chairman Central Board of Revenue (CBR) Abdullah Yousuf were also present on the occasion. The degrees of MBA in tax management were conferred on the occasion.
Mr Aziz claimed that the 27 per cent increase was the highest-ever, although the target was 17 per cent growth.
“We have a lot of work to do in this area and in the sphere of customs,” he said.
He pointed out that during the past seven years, Pakistan’s tax regime had transformed from a very narrow tax base with very high tax rate, massive tax evasion and reliance on indirect taxes.
This was primarily because Pakistan lacked in trained personnel and also because the system was complex, he said.
Now the government, he said, had come a long way in reforming and restructuring the entire tax system and working on a programme to transform it into a world class tax regime.
He said now he receives a very few complaints on tax matters which is good. Less complaints means things are working, he added.
He said tax reforms was one of the basic areas on which the present government had focused because it was realised in the very beginning that the system needed reform and reorientation. He was of the view that the fiscal policy was a major part of the overall economic management of any country.
The prime minister stressed the need for modernising customs procedure “relying more on intelligence than the physical checking.” He pointed out that his government was bringing the required change step by step.
He also talked about the corrupt practices in the customs department where, he noted, more refunds had been doled out as compared to collection.
He said in some cases, there were no exports but refunds were given. He added that his government was taking the necessary step in that regard and would not allow this to happen.
He said today's graduating class of the IBA Karachi represents the future of the tax regime of Pakistan.
Mr Aziz said Pakistan's biggest asset is its human capital, and emphasised on education as well as skills development.
“We must equip the tax department with relevant people and skills, and this is the way we are heading on,” he said. “The present course offered by the IBA is a step in this direction,” he added.
Stressing on the need for continuity in these policies, he complemented the role of the CBR.
Lauding the services of the IBA, he assured that the government would continue to invest in business education as well as higher education. He also highlighted the role of the private sector in this regard.