Assuring that Pakistan’s commitments to the International Monetary Fund will be confirmed, the Minister of Finance Muhammad Aurangzeb said that the government would not impose any additional tax to cover the income deficit.
Addressing journalists in Islamabad on Wednesday, Aurangzeb stressed that Pakistan was determined to increase its 11% tax / GDP ratio during the current financial year, in accordance with the TMI targets.
He said that current disputes on tax disputes before the courts represent a potential source of income once resolved, which would help reduce the budgetary difference.
“The revenue deficit will not be encountered by new taxes,” said the minister, adding that advances with the IMF have been constructive and that discussions remain positive.
Aurangzeb reiterated that the government is determined to achieve the target of tax agreed to GDP and expressed its confidence that the reforms, associated with dispute resolution, will stabilize income flows.
FBR to focus on tax collection
Earlier, Aurangzeb declared to the Senate Committee on Finance that the next federal budget would not be prepared by the FBR, but rather by a newly established tax administration board under the Ministry of Finance.
The minister said the new council will focus on the formulation of policies, while the FBR will be limited to tax collection.
He added that macroeconomic stability is starting to think about Pakistan’s financial indicators, citing the recent reimbursement of a Eurobond of $ 500 million and plans to issue a panda obligation by the end of November.
Aurangzeb stressed that the board of directors of the tax policy will work all year round to engage in continuous budgetary consultations, contrary to the past practice of precipitated deliberations a few weeks before the budgetary presentation.
An advisory council including experts and representatives of the private sector will also be implemented, although its recommendations will not be binding.
Senators criticize FBR practices
During the session, the members of the committee raised concerns about the conduct of the FBR. A senator criticized his heavy approach to traders, noting: “Tax collection is not carried out with a Kalashnikov. Treat traders as merchants, not like Taliban or terrorists. ”
A lawyer representing a damaged citizen allegedly alleged that the FBR had violated the presidential directives by contesting the federal decisions of the Ombudsman before the court. He argued that by virtue of the 2013 law on mediator’s reforms, ministries and divisions are required to implement presidential orders.
The Attorney General, however, argued that questions of classification of goods are not the jurisdiction of the federal ombudsmane and should be treated by the classification committees concerned.
Senator Afnan accused the FBR of having filed political motivation against him, saying that the authority had previously filed with false accusations which he successfully disputed.
Hamid Ateeq Sarwar, member of Inland’s income operations, advised the senator to continue calls through appropriate legal channels, ensuring that the decisions of the appeal forums would be respected.
Other questions discussed
The Minister also addressed questions about the virtual asset bill, confirming that the Ministry of Finance had received 16 questions from the Committee and would answer in detail. He said that the bill should promote economic growth rather than create fear.
Senator Dilawar, a tobacco producer, complained that despite an exceptional harvest this year, buyers were not willing to buy tobacco even at Rs300 per kilogram. Aurangzeb replied that irregularities in sectors such as tobacco, drinks and sugar should be treated transparently.
The members of the committee welcomed the separation of the FBR tax policy, calling it a long -awaited reform. They urged the government to ensure that the new council remains active and effective in the development of policies.
