ISLAMABAD: Minister for Finance, Mohammad Ishaq Dar Friday said that the government took corrective measures to recover the shortfall of Rs 40 billion revenue which would not cause hike in inflation rate in the country.
“The additional duties are imposed only upon the imported and luxury items which are not used by the common people”, Ishaq Dar said while talking to Pakistan Television.
He said there were also alternative to those imported items which were locally produced, so the consumers who could not afford the costly imported items might use the locally produced items whose prices would not be affected by the additional taxes.
Rejecting the notion of introducing mini budget by the government, Ishaq Dar said that it had been global practice that whenever a government faced revenue shortfall it took corrective measures.
“There are hundreds of thousands items being imported into the country, but the government has imposed the additional regulatory duty on only 350 items which are only used by the rich”, he added.
He said the introduction of additional taxes on the imported items would also help in saving the foreign exchange as the consumption of these items would be reduced and the use of local items would be increased.
The minister said that the current government had inherited the annual revenue growth of about three percent but during first two years of its tenure it achieved the average target of 16.5 percent per year and for the current fiscal year an ambitious target of Rs 3104 (20% more) was set and the government was committed to achieve this target as well.
“The more tax we will collect the more benefit the country will get,” the minister said adding it would help the country to reduce its fiscal deficit which would ultimately cause less borrowing by the government.
To a question, Ishaq Dar said the number of tax payers had been increased from 700,000 to one million in two years.
“We are negotiating with the small traders and if the talks become successful, we hope that three million more taxpayers would come under the tax net which would help in a huge jump in the revenues”, Dar added.
He said in October, 2015 the revenue collection recorded 22 percent as compared to the same period while in November, 2015 the revenue collection recorded 28 percent increase which is a great achievement by the Federal Board of Revenue (FBR) team.
The minister said that the FBR had many option to bring the people under tax net but it was giving priority to offering incentives to the people so that more and more people come under tax net.
He said FBR was also facilitating the tax payers by giving incentives and it was also simplifying the documentation in this regard. He said the traders were also cooperating with the government and hoped that they would agree to come in to the tax net.
He rejected the notion of bringing reforms in taxation system under the pressure of International Monetary Fund (IMF) saying that it was included in the election manifesto of Pakistan Muslim League (Nawaz).
Regarding Energy Reforms, the minister said that when the government took over the charge, bleeding was the worst problem of the energy sector and during previous government tenure, Rs 2100 billion were given as subsidy.
He said if the previous government had corrected the overall energy system, the precious money would not be lost and it could be used for building up a huge energy project like Diamir Bhasha Dam.
To a question, Ishaq Dar said after a sharp decline in prices of the petroleum products in the international market, Pakistan had to face a loss of Rs 100 billion in term of revenues so in order to recover this amount, the government increased duties on petroleum products.
“Besides increasing duties on the petroleum products, we also passed on a huge benefit of reduced prices to the people and currently the prices of petroleum products in Pakistan are lowest as compared to the regional countries”, he added.
He said during previous two and half years, the government’s focus was to bring the country out of economic crisis and now it had succeeded in improving the macroeconomic indicators as acknowledged by the world’s renowned economic institutions.
He said that during next two years the government would focus on creating employment opportunities, industrial and GDP growth in the country.-APP