After the provinces failed to attend the meeting convened to finalise taxation measures for the next fiscal year, the expert led Economic Advisory Council (EAC) decided to approach the provincial governments to convince them on taxing the agriculture income.
The EAC chaired by Finance Minister Dr Abdul Hafeez Sheikh also decided to seek legal opinion on whether the federal government could impose the Gross Asset Tax in replacement of turn over tax after the passage of 18th Constitutional amendment.
Talking to reporters after the meeting, Finance Minister Dr Abdul Hafeez Sheikh said that it was principally decided that the tax rates would not be increased and the existing tax system would be made more equitable by bring evaders and short fillers under the tax net. About the increase in salaries, he said that it was the prerogative of the federal cabinet to decide. In reply to a question about the possibility that US might suspend assistance to Pakistan in wake of the Abbottabad incident, the minister said there was no immediate danger as economic relations between the two countries were at government level.
Convener of EAC Dr Hafiz Pasha said that the projected revenue collection target of Rs 1952 billion for the next year was unrealistic and must be made rationale. He said that the normal growth revenue target by next year could be Rs 1775 billion, adding that if Rs 75 billion of additional revenue measures on account of withdrawal of exemption were included; it could reach up to Rs 1850 billion.
He said that revenue rationalisation was significant to ensure that Public Sector Development Program (PSDP) was not affected. He said that EAC members would meet provincial governments to convince them for bringing agricultural income into the tax net. He underlined that Gross Asset Tax was not an additional tax, but an alternative measure in place of turnover tax. Explaining, he said that people declare their income less than their assets, leading to the consideration of bringing their assets into the tax net. The meeting also discussed about broadening the tax net, ensuring equity in tax system, overcoming energy shortages, capital markets and banking sector reforms and undertaking key micro economic reforms to improve competitiveness of industry and agriculture.The meeting was attended by Dr Hafiz A Pasha (Convener EAC), Deputy Chairman, Planning Commission, Governor, State Bank of Pakistan, Muhammad Hamayun Khan, Finance Minister (Khyber Pakhtun khwa), senior officials and members of EAC including Syed Salim Raza, Farooq Rahmatullah, Nasim Beg, Dr Aisha Ghaus Pasha, Hassan Ali Chanhio Ali Jameel, and Arshad Zuberi.
