Country in a state of financial emergency: FBR chief

Federal Board of Revenue (FBR) Chairman Salman Siddique has said that the government is facing serious financial crises and it is not in a position to give any industrial relief package. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI) and later talking to newsmen the other day, he said that the country is in a state of financial emergency.
"No one will come to rescue us and we have to rely on our own". He said: "The conditions are grim, and we have to move fast in a calculated way to overcome the crises, or else we may face severe economic and social setback. We have no option but to go for self-reliance. We have to realise where we are standing".
The FBR chief said that until Pakistan was receiving financial assistance from abroad it was managing its affairs well. Now when conditions changed and the state started borrowing from State Bank Pakistan (SBP) economic crises started looming.
Salman said that there must be a limit for government borrowing. The country is facing Rs 812 billion deficit, "and we have to adopt measure to correct it". Efforts are underway to bring the government borrowing to zero, he added.
The FBR chief said he was favour of all sectors paying taxes, including agriculture sector. Work on these issues has been down. However, it is up to politicians to decide.
Referring to circular debt, Salman said that it was a wrong presentation that circular dept had touched Rs 500 billion. The factual position is that it is Rs 140 billion.
The FBR chairman assured the business community that Revenue Adviser Council would be activated and Alternative Dispute Resolution Committee would be revived.
About the proposed 'reformed general sales tax' (RGST), he said that it was not known who would be implementing it and what would be the fate of zero-rated sectors. The biggest concern of FBR is that if it is implemented how the FBR would handle refunds cases and how refunds would be made in shortest possible time.
He proposed that a committee comprising of private and government sector should be formed to prepare policies, which should be vetted by third party, to sort out measures which can be implemented immediately and measures adopted after some time for economic improvement and working of FBR.
About 3.5 percent tax imposed on agriculture sector, Salman clarified that it is not a tax on agriculture sector. It is a tax on agriculture produce trading. Agriculture income tax is a provincial subject.
He said that the tax on agriculture produce trading has been imposed after thorough consultation and after obtaining legal advice.
Referring to government financial constraints, the FBR chairman said that the government is in a very tough position and it can not continue to provide Rs 20 billion subsidy to power annually. It has been decided to privatise government own utilities and as first instance Islamabad Electric Corporation will be privatised soon. Deadline has been given in this regard, he added.
He said that budget deficit may not be more than 4.7 percent.
He said that FBR would facilitate business community in the ambit of law. All letters and queries will be responded. Efforts would be made to improve the image of FBR and customs, he added.
Former president of KCCI, Haroon Farooqui, said that over 6 months have passed of fiscal year and only one meeting of budget anomalies committee was held so far.
President of KCCI, Saeed Shefiq said that contribution of lawyers, consultants, engineers and doctors is negligible in tax, and suggested that it should be increased.
He demanded advance tax at the rate of 10 percent on power commercial consumers and suggested that it should be brought at par with industrial consumers, which is 5 percent.