Islamabad:
Pakistan exhorted the International Monetary Fund (IMF) to allow it to reduce the tax rates with regional countries to stop the flight of growing external money, because the world lender has not seen any major progress in typing real income from retailers and real estate concessionaires.
The last last day of the talks, the IMF also informed foreign diplomats about the results of the first review. The IMF has largely shown satisfaction with regard to the implementation of the program, except in the fields of property, real estate and privatization, according to the people during the meeting.
The world lender has supported a constant increase in economic growth, saying that any rapidly rates at a higher growth rate could cause concerns about higher tax and current deficits.
During the interaction with foreign diplomats, a diplomat asked questions about the expansion of the federal cabinet in the middle of the IMF visit to Pakistan. According to sources, the IMF delegation said that the size of the cabinet was even smaller than the previous cabinet.
Prime Minister Shehbaz Sharif has doubled the size of his cabinet over 50, also creating a new department – the public affairs unit.
The IMF informed diplomats of global progress in the implementation of key reforms, in particular the introduction of agricultural income tax. He recognized that progress in the collection of taxes in the agriculture sector would be progressive.
However, the sources said that the IMF said at the meeting that there was no major success in bringing the retailers to the net, and that it was also necessary to make changes in the real estate sector. The IMF also underlined the privatization program, they added.
The IMF briefing was not Candide and the chief of the Mission Nathan Porter gave guided answers to the diplomats, the sources said.
Pakistan and the IMF have filled their gaps on the tax objective, which, in terms of economy size, could remain at 10.6% of GDP, but in absolute terms, it would drop below RS12.5 Billions due to the now estimated reduced size of the economy.
Meanwhile, the Pakistani authorities urged the IMF on Thursday to allow it to reduce tax rates to stop the capital flight from the country. The problem was raised by the FBR, which indicated that due to the attractive rates in the Gulf region, the money took place, the sources said.
Due to high transactions taxes, political and economic uncertainty, people withdraw their money and are mainly stationed in Dubai. The FBR has identified 72 real estate agents, who play a decisive role in investments in the Gulf, according to government sources.
L’Express PK Press Club has seen the list of these names, which transport people from certain influential families. However, the government has no way of preventing them from investing abroad. Some of them are tax declarants with the FBR, officials said.
The sources said that the FBR had admitted before the IMF that traders and jewelers were both hard nuts to break. The FBR also admitted before the IMF that is due to major design defects, the Tajir Dost program had failed.
The government was supposed to perceive 50 billion rupees from traders as part of the program, but it ended up collecting peanuts.
The IMF was informed that large traders also prevented the smallest from joining the program and, therefore, it could not extend the regime to 43 cities. The FBR plan to bring a minimum of 10 million retailers to the net net, has been informed of the IMF.
Nevertheless, the FBR informed the IMF which he managed to show progress. During the first eight months of this exercise, there was a 30% increase in registrations for new taxpayers and the number of yields increased from 509,173 to 774,494. There was an increase of more than half of the declaration of declaration and, consequently, the retention of tax payments also jumped 43% in the first eight months.
Tax payments in the corporate sector on the back of higher taxes and more deposit increased from 86 billion rupees to 291 billion rupees.
The IMF was informed that the FBR had made changes to income tax declarations to facilitate that people show their land ownership. But the FBR did not have access to TEHSIL level and cities’ land detention data. There was also a problem that people gave their land for rental, which will make permission for tax permission difficult.
The fund was informed that there was progress in the expansion of the point of sale network (POS) in stores – a almost real connection between the store and the FBR database. In June, 30,500 stores were integrated through a POS -A number which has now increased to 37,200, was informed of the IMF.
A brand company can have dozens of stores, which means that the actual number of FBR traders can be around 10,000. The FBR plans to target 137 department stores to follow sales, sources said.
The real challenge will be to ensure that the rich jewelers in the net who are still outside the FBR web, said sources.
The sources have indicated that the IMF will modify the objective of the FBR to bring new taxpayers into the net by specifying the actual number of new retailers, real estate dealers and wholesalers. This is done to avoid the generic declaration that tens of thousands of new taxpayers have been brought to the net, the sources said.
