Federal Minister for Finance and Economic Affairs, Dr. Abdul Hafeez Shaikh said on Tuesday that upcoming budget for the fiscal year 2011-12 would focus on stabilization of economy with measures to enhance revenues to help minimize dependence on external finances.
He was talking to journalists after holding a consultative meeting with Pakistan Business Community with an aim to get inputs and proposals for the budget.Among others, the meeting was attended by Deputy Chairman Planning Commission, Dr. Nadeem-ul-Haq, Governor State Bank, Dr. Shahid H. Kardar, Chairman Federal Board of Revenue, Salman Siddique and other government officials while the business community was represented by representative of chambers of commerce and associations from all across the country.
The federal minister disclosed that steps to cut the government expenditures, measures to reduce dependence on external finance and job creation would feature in the upcoming budget.
Earlier, talking to businessmen the federal minister said as many as 0.7 million entities have been identified who could be taxed adding that his inclusion into the tax net would broaden the tax base and help enhance the tax to GDP ratio for the prosperity of the country.
The federal minister said that the overall economy was in very bad condition when the current government took over in 2008 adding that there have been challenges of low growth momentum, external shocks, reduced foreign exchange reserves and depreciation of currency value.
Besides he said that due to overspending in the past, the government had to take some harsh measures besides going to International Monetary Fund to meet its expenditures.
He said that the last year’s floods and oil prices have impacted economy adding that government was facing challenges to stabilize economy, which he said was pre-requisite for all developments even for the economic growth.
He said that the private sector should be given its desired place and importance to help enhance growth adding that this sector has been facing exclusion due to public sector dominance.
Shaikh said that government was engaged with all the segments of business and corporate sector to devise a mechanism whereby it could seek new avenues for the generation of income and facilitate the business community for further investment.
To a question about agriculture tax, the federal minister said that he himself believes that all incomes irrespective of the sources must be taxed,however added that under the constitution, agriculture tax was a provincial subject.
On the refund issue, the federal minster said that FBR since September 2010 to April 18, 2011 cleared 40,000 refund cheques amounting to Rs.31.3 billion,which he said shows increase of 300 percent over the refunds of corresponding period of last year.
The business representative on the occasion suggested various tax measures of their related fields. They said that the upcoming budget should be business friendly and also highlighted the importance of enhancing PSDP for infrastructure development to help generate economic activities.
They suggested for mitigating losses of State Owned Entities besides overcoming energy shortage to help industrial growth and low-cost production to compete at international market.
The business community supported the documentation of economy and implementation of Reformed General Sales Tax (RGST), however added that the tax judicial system should be separated from the over all revenue system to make the collection smooth and transparent.
They were of the view that the government should not issue separate National Tax Numbers (NTNs), instead the National Identity Card number should serve for this purpose adding that this would help broaden the tax base.
They also suggested that nobody should be allowed to open bank account unless he/she provides NTN.
