ISLAMABAD: No tax relief is possibly under consideration of the Pakistan Muslim League-Nawaz (PML-N) government as it sets an ‘ambitious’ tax revenue target of Rs 2,810 billion besides setting the target of bringing 100,000 new taxpayers to the tax net while eyeing withdrawal of Rs 104 billion tax exemptions during 2014-15 financial year, Daily Times has reliably learned.
The incumbent government had earlier set Rs 2,475 billion tax revenue target for the ongoing fiscal; later modified it at Rs 2,045 billion, and through another revision, it was again set at a more realistic-cum-achievable target of Rs 2,275 billion due to some ‘known and unknown’ reasons.
“The government has planned to earn an additional Rs 200 to Rs 250 billion through new tax measures during the next fiscal year,” an economist said.
A senior official at the Finance Ministry requesting not to be named said that presently, the amount collected to meet the tax revenue target stands at around Rs 1,950 billion while in one month, the government is expecting to collect Rs 325 billion more. Apparently, it had become a tough task for the government to meet the tax revenue target of current financial year, he added.
Background interviews and discussions with economists reveal that the upcoming federal budget is likely to bring inflationary impact on the already burdened masses as the government is all set to increase taxes on cigarettes, agricultural tools/equipment, steel iron, surgical, plant machinery, cosmetics, paints, varnishes etc.
Finance Ministry sources, who wished not to be named, told this scribe that prices of cigarettes are likely to go up by 70 percent in line with a proposal of the World Health Organisation. Similarly, they said, five export oriented sectors, including sports, textile, surgical, garments and carpets, would witness a hike in sales tax by up to 5 percent which currently stands at 2 to 3 percent. They said that commerce and textile ministries were opposing the idea of increase in sales tax by saying that this measure would affect export.
The government has also planned to tax air travel with 10 percent of withholding tax, while imposition of up to 17 percent standard increase in the General Sales Tax (GST) on steel iron, plant machinery, agricultural tools, imported building material etc. The sources were of the view that the government was taking “ambitious” tax measures, especially by giving an end to heavy subsidies for power sector and complete elimination of concessionary tax regimes within next three years only to meet the commitments it had earlier made with the International Monetary Fund (IMF) to secure financial assistance.
They said that the government was set to introduce Electronic Invoicing System to prevent tax evasion by the business community. During the next fiscal, the government would save Rs 104 billion while Rs250 billion would be saved during next two years with new tax measures. The government, they said, would however keep intact those taxes that were contributing to stop the inflation and it would not withdraw Rs 90 billion subsidies being enjoyed by independent power producers (IPPs) during the upcoming fiscal.
ISLAMABAD: Federal Minister for Planning, Development and Reforms Ahsan Iqbal on Friday said the ...