Finance Minister Shaukat Tarin to expand Pakistan's tax net
Finance Minister Shaukat Tarin has said that the new finance law does not empower the Federal Board of Revenue to arrest anyone for tax evasion.
Explaining the new finance law, he accepted that there are ways in which the law can be abused. “We, however, won’t allow it.” The FBR will not be able to arrest tax evaders because they don’t have this power.
The Rules of Business, when they will be released, will state that only I have the authority to approve people’s arrests, he shared while speaking on Nadeem Malik Live on Tuesday.
“No one will be arrested before a third-party audit,” he confirmed, adding that the people who haven’t filed their taxes will be held accountable.
He said he has formed a three-member committee, comprising FBR chairperson, SAPM on revenue, and himself, which will look into the tax evasion offenses.
Growth is our priority. It should be inclusive and sustainable. “When the economy grows, then incomes will increase and more jobs will be created.”
We are a net importer of food. We couldn’t have imagined this a few years ago. We are now dependent on the vagaries of international food prices. “We have to grow our industrial exports. We want to create dollars. The crisis was serious but it was averted because of the remittances we received because of PM Imran Khan.”
He shared that he is confident that Pakistan’s growth would reach 5% this year. Between now and 2023, we want to reach 7%. We can achieve the target if we keep the momentum going.
Tarin shared that he has asked Commerce and Investment Adviser Abdul Razak Dawood to give him suggestions on ways to improve the economy.
We are looking into new avenues such as the spare parts industry and IT. “IT can prove to be a game changer.”
He remarked that it will be given the status of an industry and they have started listening to the concerns of people who belong to IT. India was able to increase its growth by almost 100% because it invested in IT. “We can try the same.”
On this, SAMAA TV anchor Nadeem Malik questioned him about red tape in the country. There was a standard company that wanted to open an office for its 1,500 people in the State Life building but they weren’t able to because of permission issues. “Don’t you think red tape affects these companies?”
In response, the finance minister remarked that the PM has decided to form special technology zones to solve these problems.
Speaking about the country’s tax strategy, Tarin remarked that it can’t continue the way it has been so far. We have failed to bring more people into our tax net and we keep burdening the same people who pay their taxes. Even when we talk about sales tax, we haven’t been using technology for this purpose. “We need to catch people involved in informal businesses.”
My focus will be on bringing more people into our tax net, he remarked. Our two targets are people who don’t pay taxes at all and retailers. Retailers reports sales worth Rs5 billion but we know that the number is Rs8 to 10 trillion. “I will use technology and bring innovation” to prevent tax evasion.
There are certain black holes that we need to close. Real estate was a black hole and now we are trying to solve its problems through new laws. Another black hole is our agriculture. “We have told provinces that if you can’t collect taxes on agricultural land, then we will do it and give it to you.”
On IMF, he remarked that IMF doesn’t approach any country on its own but countries approach it depending on their needs.
“When I first went to them, the political scenario was different. The world was supporting us and our conditions were not so strict.” Now, because of our geopolitical situation, western countries aren’t supporting us. This meant that our IMF restrictions were “front-loaded and strict”. But should we blame Imran Khan for this?
Our tariffs have really squeezed the economy. We hope for the results to be better.