The government is paying heavy political price for getting RGST approved from the House and there is no plan to issue a notification for its imposition, said Hina Rabbani Khar, State Minster for Finance here on Thursday.
Responding to a question in the National Assembly whether government was considering issuance of a notification for the imposition of RGST, she said there was "no" plan. Had there been such an intention, why should we have spent more than a year on consultation to take political parties on board, she added.
She said that the RGST is meant for documentation of the economy and has nothing to do with revenue mobilisation. We would welcome recommendations as we agreed with respect to exclusion of medicines, however, the spirit of the bill must not change, she added.
When asked about the status of borrowing from State Bank of Pakistan (SBP), she said that the borrowing was substantial, adding "I do not have exact figures but borrowing from SBP is not zero".
She further said that the government was facing the challenge of inflation and has tight fiscal space for which government expenditure is being curtailed. Khar said that there were 2.3 million taxpayers and rejected the notion that salaried class was the major contributor to taxes adding that only Rs 35 billion tax was collected form salaried class out of total Rs 528 billion.
Responding to another question, she said currently there is no proposal to introduce uniform formula for collecting tax from each taxpayer because under existing Income Tax Ordinance 2001, tax is imposed on quantum of taxable income of every person. She said tax-to-GDP ratio is 4.6 percent and the ratio of direct tax collection is 40 percent against 60 percent indirect taxes. Following the efforts of FBR, she said 1.4 million new return filers were brought on the tax roll in 2008 and 2.3 million in 2010, which added revenue worth Rs 388 million and Rs 527 million in the two respective years.
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