Minister for Finance Ishaq Dar on Saturday rejected opposition’s criticism over the proposed one percent increase in the General Sales Tax (GST), stating that the proposed GST would not be withdrawn as the country’s economic conditions did not approve such a drastic measure at this point in time.
Winding up the budget debate in the National Assembly (NA), Dar defended the government’s decision to seek further loan from the International Monetary Fund (IMF), stating the time had come for the country to return IMF loan obtained by the previous government. He said the government would repay an amount of $ 3 billion to the IMF during the next fiscal year. He assured the House that national interest would be held supreme in talks with the IMF.
The finance minister also announced incorporating 21 recommendations out of the 112 forwarded by Senate to NA, and promised reduction in GST as soon as the revenue position improved.
Covering all major points raised during the budget debate by opposition lawmakers, Dar said circular debt of Rs 326 billion would be cleared within two months. The development budget has been increased from Rs360 billion to Rs 540 billion in FY 2013-14, which is a 50 percent increase, he added.
Discussing the proposed increase in General Sales Tax (GST) from 16 to 17 percent, Dar said during the current fiscal year, Federal Board of Revenue (FBR) faced a shortfall of Rs 374 billion and expected to collect Rs 2,007 billion against a target of Rs 2,381 billion. Next year, he added, the government would push to collect Rs 2,475 billion in tax revenue.
He said reforms were suggested in income tax law and one of the changes was to end various income blocks and use a unified definition. Rental block is one block whose rate is different from various other incomes and present presumptive tax rate of rental income is 10 percent, which is a full and final settlement of tax liability.
“We have suggested in the budget to increase this tax to 17.5 percent by increasing it through different slabs. But no change was suggested in the presumptive character of this tax,” he added.
In light of recommendations of the members, Dar said, it was decided to keep withholding tax at two rates of 10 and 15 percent on rental income which will be adjustable after final assessment.
The minister further said access to banking information was part of tax reforms which was in line with changes taking place in the world at large. However, it was decided that field officers would not have access to bank accounts and this access was restricted only to the chairman and members of FBR.
It was also decided that no one in FBR would be allowed to make information of bank accounts public and the legal sentence for this violation was increased from six months to one year with a raise in fine from Rs 50,000 to Rs 0.5 million, Dar added.
Talking on measures taken for security of strategic assets of the country, the finance minister said Pakistan’s security of strategic assets was prepared with a great sense of responsibility and its defence measures matched international standards.
In 1999, the program was divided in different parts but now it has a unified national command authority headed by the prime minister and the Special Projects Division (SPD) acts as liaison among various programs, he stated.
He said the program was protected by strategic forces command that worked under a strict regulatory regime relating to nuclear safety, including protection of material and facilities, fissile material control, accounting and steps against illegal trafficking and border controls.
The finance minister said the program had an export control regime of international standards set up by Nuclear Suppliers Group, Missile Technology Control Regime and Australia Group. He said the country’s nuclear program was protected by a highly trained security force of 25,000 personnel equipped with modern weapons along with Special Response Force, Special Escort Force, Marine Force, Counter Intelligence Teams and Personnel Reliability Programs.
Dar said the current weak economic situation, energy shortage and terrorism were the main challenges for the government, calling upon parliamentarians to guide the government effectively in countering them.
He also talked on government’s measures to end discretionary spending of ministers, ban on buying of vehicles for important personalities and elimination of wasteful expenditures. He said all recommendations had been submitted in the National Assembly Secretariat.
Dar also pinned hopes for achieving the goal of self-reliance in cooperation with all parties in the parliament and reiterated the resolve of the government to continue serving the masses.
Earlier, during the debate, opposition parties criticised the budget, particularly for government’s income tax proposals besides increase in GST rate, waiver of customs duty on hybrid cars, taxing educational institutions and removal of Benazir Bhutto’s name from income support program.
Govt won’t budge on GST
