ISLAMABAD: Finance Minister Hafeez Shaikh on Wednesday said the government also needed to put its own house in order by reducing non-development expenditures and cutting the size of the federal cabinet to win the people’s support on the Reformed General Sales Tax.
At a background briefing on the reformed GST, organised by the Information Ministry for newspaper editors and TV anchorpersons, the finance minister was asked whether he was in favour of cutting the size of the cabinet, to which he said, “Yes, I am for a cut in the cabinet size and reduction in non-development expenditures… I say this at every forum.”
Shaikh acknowledged that the tax machinery was inefficient and said the tax system had to be reformed. “We need to make serious efforts… steps are being taken to fix the FBR machinery and they will be in place soon after the implementation of the reformed GST,” he said.
The finance minister said a wrong impression was being created that the Senate and the National Assembly could not legislate on the reformed GST. “The Centre will collect the reformed GST only on services and that too with the consent of the provinces… the Centre will collect it only on goods.”
He also made it clear that the reformed GST could only be implemented if all the five assemblies passed the bill. “If any assembly rejects the bill, it cannot be implemented,” he said, adding that the commitment with the IMF to implement the reformed GST was made in 2008.
Finance Secretary Salmaan Siddique said the tax system was being automated to ensure that no one could evade or escape the tax. “It will be computer-based and this system will be in place in March 2011.” FBR chairman Sohail Ahmed said the reformed GST was in the VAT mode.
