Prime Minister Imran Khan on Wednesday said that the government is taking measures to bring every potential person into the tax system, introduce reforms in the Federal Board of Revenue (FBR), bring automaton in tax machinery and end massive corruption within the tax machinery, which was to the tune of Rs 700 billion as pointed out by Shaukat Tareen in 2013.
Addressing a ceremony here, Imran Khan directed Chairman Federal Board of Revenue (FBR) Shabbar Zaidi and Advisor to Prime Minister for Commerce, Textile, Industry and Production, and Investment Abdul Razak Dawood to address concerns of traders, businessmen and industrialists to resolve their tax-related issues.
Khan said the FBR needs reforms to overcome trust deficit of the taxpayers, since around Rs 700 billion of corruption per year had been witnessed in the FBR. The figure of Rs 700 billion corruption in the FBR was pointed out by the then Finance Minister Shaukat Tareen in 2013.
While talking about the reforms, he said the government is minimising human interaction between the taxpayer and tax officials through automisation in the process of taxation. The FBR is also introducing helpline facility for the taxpayers to provide any kind of information spontaneously.
He said it would be treachery with the nation if the government backed down on the issue of tax. He said the government doesn't have any money to run the state and without tax the money cannot be generated. If tax is not paid, the country will be further indebted, he warned.
He categorically said the strikes or demands (other than facilitation for opting for registering in tax system) would not be catered. He said that implementation of principles of the State of Medina is compulsory for economic development. It (State of Medina) had justice and mercy, while the governance system took responsibility for all, including the poor, marginalised and elderly.
They didn't have money, but there was justice and rule of law, PM Khan said, explaining how Medina's model of governance was important and can be used by Pakistan.
He again spoke about taxing the rich and spending on the poor. The West refers to this technique as progressive taxation, the Premier said. The country needs to move forward, he said, repeating his appeal to the public to come into the tax system. The Prime Minister said that Pakistan cannot be run like it was being run in the past. Seventy per cent of the tax accumulated in Pakistan is driven out of 300 companies only. He said the service sector accounts for over 20% of the economy but pays only 1% tax. The agriculture sector makes a contribution of 20% to 25% to the GDP, but again its tax contribution is a mere 1%, he said.
"The country's debt soared to Rs 30,000 billion in 2018 from Rs 6,000 billion in 2008," he said and added efforts are under way to introduce reforms in the FBR.
He said half of the amount accumulated in a year goes in paying off the interest on the loans borrowed earlier. The business community has donated millions of rupees for the construction of Shaukat Khanum Cancer Hospital, but they hesitate to come in the tax system. He said they have been seeking any alternate, i.e., fixed taxation. He said, "We are connected with business community and the government will facilitate the investors, traders and business on every step."
He said, "Only 1.5 million people pay their tax out of 220 million, and if we all pay tax, we would definitely get out of this loan, and not only this we will definitely progress." He said the person who will ensure ease of doing business has been interviewed and soon his name will be announced. He said 10 years ago Pakistan's ranking in ease of doing business was 77 and now it is 147. "Our exports declined and faced deindustrialization too," he added.
He ensured the business community that ease of doing business will be implemented fully. He said ease of doing business is more relative to the smaller and medium businesses because large businesses do not bother much. He urged that the country needs more exports to fill the gap of imports and exports to get out of current account deficit. And, that's why incentives to exporters are given in budget, he added.
Khan said Pakistan has started off with the crackdown on smuggling and security agencies including Pakistan army have been contacted. "We have started talks with Afghanistan over smuggling through Afghan Transit Trade. The smuggling has directly affected business of Pakistan and industry cannot flourish ahead without curbing smuggling, he said.
He pointed out that a limited community is not in favour of registration of business through CNIC numbers because it is involved in the smuggling too, out of which it gets huge profits at the cost of loss to this country.
Imran Khan went on to say that those involved in the money laundering have their own interests. They have money and properties abroad and when the dollar price goes up, it becomes in favour of their businesses. Speaking about the treatment given to prisoners in Pakistan, PM Khan said those who have looted billions of rupees are provided ACs in jail while a poor man who has committed a small crime rots in a small cell.
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