ISLAMABAD: The Economic Advisory Council (EAC) here on Saturday recommended that the provinces be consulted on the agriculture income tax.
The meeting of the Economic Advisory Council (EAC) was held under the Chairmanship of Dr. Abdul Hafeez Shaikh, Minister for Finance and Revenue.
The meeting was attended by Dr. Hafiz A. Pasha (Convener EAC), former Finance Minister Shaukat Tarin, Deputy Chairman, Planning Commission Dr. Nadeem ul Haq, Governor, State Bank of Pakistan Shahid Hafeez Jardar, senior officials and members of EAC including Dr. Ijaz Nabi, Jahangir Khan Tareen, Syed Salim Raza, Farooq Rahmatullah, Ali Habib, Nasim Beg, Farid Rahman, Dr. Aisha Ghaus Pasha, Muhammad Arshad Ch., Ali Jameel, and Arshad Zuberi.
Working groups on major sectors presented their recommendations, says a statement issued by the Ministry of Finance here.
The taxation group highlighted the taxation areas being considered by Revenue Advisory Council (RAC) which include improving equality in the tax system and broadening the tax net.
It was also recommended that the provinces be consulted on the agriculture income tax.
Dr. Hafiz A. Pasha stated that RAC will finalize its budgetary proposals in the next few days and will present them in the next RAC meeting.
He also suggested that provincial representation may be ensured in next EAC meeting.
Farooq Rahmatullah presented the budgetary proposals on the energy sector. It was suggested that distortions created by freight equalization pool may be removed.
LPG pricing be brought in line with import parity pricing and load management for natural gas be prioritized.
The presentation on capital markets addressed areas to promote investment, encourage corporatization, transparent trading and removing disparities in the tax structure.
The EAC also deliberated on international trade and emphasized the need of removing onerous constraints of energy shortage and high interest rate.
Banking sector reforms mainly dealt with policy formulation and institutional development.
The emphasis was on establishing a fully functional debt authority that can professionally deal with the challenges of interest cost, hedging and optimal maturity.
Agriculture sector group focused on cotton - textile biggest exporter, Crop water usage and dairy.
It was suggested that R&D be improved and the legal and institutional framework be reformed to improve production of cotton bales.
It was recommended that canal water be priced realistically. Following proposals were presented for the development of dairy sector:-
* Small dairy household be activated through community dairy farms.
* Move from subsistence farming to surplus farming.
* Need to provide knowledge, capital and markets.
Discussion on growth emphasized that budget formulation was taking place in difficult circumstances.
The new growth strategy emphasizing productivity led growth provides an important alternative route to growth.
The role of SME sector was considered imperative for growth.
Addressing the issue of circular debt to ease energy shortage can help bring online unused capacity. Work on tariff will be taken forward and presented in the next EAC.
Finance Minister highly appreciated the valuable contribution of all EAC members. He assured all support to EAC for its future work. The next meeting of EAC will be held on May 7.
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