ISLAMABAD – State Minister for Finance Hina Rabbani Khar on Thursday said there were still reports of corruption in the Federal Board of Revenue (FBR) despite the government’s efforts to eradicate it.
“The civil society is equally responsible for corruption in the FBR as such businessmen are not willing to pay taxes and they are paying bribes to the FBR people. However, there is improvement in the FBR but it could be improved further,” Hina said while responding to various questions raised by the members of the Lower House during the Question Hour.
The minister said the total amount of foreign loans outstanding as on September 30, 2010 were $53.7 billion, comprising $44.862 billion Public and Publicly Guaranteed Loans and $8.908 billion IMF. She said serious efforts to eradicate corruption in the tax collection system were underway.
She urged the parliamentarians to play their role in improving the FRB, saying the ministry would welcome formation of a sub-committee of the standing committee on finance to contribute to the improvement of the FBR. The minister also acknowledged that the government was facing a “tight fiscal situation” and for the same reason the development expenditure had been frozen. However, she shrugged away the impression that the crisis was so acute that the government was even short of funds to pay salaries to its employees. She said the government made refunds of Rs 13 billion during the current fiscal year.
However, she acknowledged that refunding was a major issue, which was damaging the economy and needed to be resolved soon. “This will encourage more taxpayers to be included in the tax net,” she said, adding that refunding was also an obstacle in the way of the reformed GST. She said the refund system had been improved.
She said the main spirit of the reformed GST bill was to ensure documentation of country’s economy. “The RGST is mainly meant for documentation of economy rather than resources’ mobilisation,” she said. The govt would accommodate all recommendations to improve the bill “without compromising on its spirit, which is documentation of the economy”, she said.
She said there were Rs 2.3m taxpayers and rejected the notion that salaried class was the major contributor of the taxes as only Rs 35b tax was collected form salaried calls out of total Rs 528b collected during the year.
