ZAHEER ABBASI, SOHAIL SARFRAZ & SARDAR
SIKANDER SHAHEEN
ISLAMBAD: The government has announced three-day extension in the date of Asset Declaration Scheme till July 3 and appealed to the people to avail this opportunity as the newly constituted Benami Commission would swing into action against undeclared assets.
Speaking at a press conference, the government economic team led by Advisor on Finance Dr Abdul Hafeez Shaikh, Minister of State for Revenue Hammad Azhar, Chairman Federal Board of Revenue (FBR) Shabbar Zaidi and Special Assistant on Information Dr Firdous Ashiq Awan announced the extension in date hours before its expiry with an appeal to take benefit from this opportunity as Benami Commission has already been established and adjudicating authority and commissioners to deal with Benami properties are notified. The Benami Commission would become fully operational from July 1 to take action against the Benami properties and accounts.
Chairman Federal Board of Revenue said that a Presidential Ordinance would be promulgated for extension in the date for filing of the declarations under the scheme. Technically speaking “we have not given extension, but people who are in queue have been provided an opportunity to avail the scheme till office timings of July 3. On July 1, there is a bank holiday and queue of pending applications would be cleared till July 3, he added.
The FBR has not extended date for filing of income tax returns, he replied to a query of Business Recorder and continued that so far, 85,000 persons have offered to avail the Assts Declaration Scheme and the number is expected to reach 100,000.
Zaidi also unveiled that from August 2019, the CINCs would become National Tax Numbers for the purpose of taxation and institutional reforms in the FBR would begin from next week and sales tax remigration process has simplified from July 1, 2019.
The applicants are not required to interact with tax officials and now can obtain sales tax registration after biometric verification, Zaidi said.
When asked about the amount of tax collected under the scheme, Minister of State for Revenue Hammad Azhar stated that a sizeable amount of revenue has been received. The encouraging aspect of the scheme is that for the first time businessmen having middle size income and those in markets have availed the scheme.
In order to achieve revenue collection target of Rs 5550 billion for 2019-20, Shabbar Zaidi said that the FBR would have to remove the ‘sectoral disparity in taxes’. A major disparity in tax system is that the services sector contribution in taxes needs to be raised to 60 percent against industry’s contribution which is paying 70 percent of the taxes.
He said that the Prime Minister has never directed the FBR to arrest top 100 evaders or defaulters. However, action would be taken against defaulters as per law.
Advisor on Finance Dr Abdul Hafeez Shaikh informed that budget was based on five fundamentals with external account management, strict austerity measures, helping the poor, facilitating industry, and mobilizing revenues and government was ready to take difficult decision for revenue mobilization if needed.
The rich in Pakistan are paying relatively less taxes as compared to other regional countries and there is other option for them other than to contribute in taxes as resources are required for infrastructure development and other facilities to the people. The advisor said that the Prime Minister is taking personal and keen interest to achieve Rs 5.5 revenue collection for the next fiscal year to have fiscal space for infrastructure and other development activities for welfare of the people. We must be satisfied that through a democratic process was adopted from discussion on budget to approval from the Parliament and to approval of supplementary grant.
Sheikh recounted that the country’s total debt was reached to about Rs 31,000 billion, whereas the foreign loans had touched the figure of $100 billion and exchange rate was under great stress owing to gap between exports and imports and historically high current account deficit. He said several measures have been proposed in the new budget to deal with external threat and regulatory duties as well as higher tariffs were imposed to lessen country’s imports of luxury items and finished products, , which will continue in the next budget for 2019-20.
He said current account deficit has been brought down from $20 billion to $13.5 billion and measures are being taken in the next budget to contain it to $7 billion dollars.
The Advisor said $9.2 billion were mobilized from friendly countries apart from $3 billion oil facility from Saudi Arabia on deferred payments and $1.5 billion promised by Islamic Bank and an agreement of $3 billion has been signed with Qatar well.
Pakistan will also receive $6 billion from International Monetary Fund (IMF) and what would be more beneficial for the country of going into IMF programme that it would send positive signals to the world that Pakistan is serious in undertaking reforms to fix the economic challenges.
The advisor was regretful that the country has to pay halve of its tax collection in debt servicing of loans taken by the previous governments and over 50 percent of federal taxes from divisible pool are transferred to the provinces as this is a Constitutional obligation. We have allocated Rs 50 billion less for civilian government’s expenditure under austerity drive of the Prime Minister.
He added that austerity has started from the top under which salaries of cabinet members have been decreased by 10 percent, while a raise of just 10 percent has been announced for government employees from grade one to 16 and five percent for 17 to 20 grades while there would be no increase allowed to working above 20 grades. Armed forces have volunteered to freeze their budget for next fiscal year, added the advisor.
He said budget to help the downtrodden under social safety net has been doubled from Rs 100 billion to Rs 191, cash transfers for needy women will be ensured under this initiative and poor people will also get health cards. Additionally, he said Rs 216 billion has been reserved to those consuming less than 300 units monthly and they counts for 75 percent of the total consumers.
He said that Rs152 billion have been allocated for the development of newly merged tribal districts with Khyber Pakhtunkhwa, while Rs 925 billion has been earmarked for development projects under Public Sector Development Programme against Rs 550 or Rs 575 billion for the just concluded fiscal year.
Dr Abdul Hafeez Shaikh said industry will get gas and electricity on subsidized rates and tariff on the import of raw material for the industrial sector has been made zero rated. He said all kinds of taxes have been abolished on over 1650 tariff lines so that industry can flourish and ease of doing business can be facilitated in the country.
He said incentives have been maintained for the industrial sector and no tax has been imposed on exports and levies will only be on domestic sales.
Speaking at the presser, Information Minister Firdous Ashiq Awan said the new federal budget is the reflection of Prime Minister Imran Khan’s vision of development, public welfare and way forward to steer the nation out of economic crisis. “This budget challenges status quo it is part of the PM and our government’s comprehensive economic reforms agenda that envisages economic progress and prosperity to turn the lives of the people for good through welfare initiatives,” the minister said, adding that the purpose of a joint conference of top government officials was to take the media onboard about different aspects of the newly passed federal budget that would come into effect on July 1 (today).
