Harmonisation of agriculture tax policy: provincial finance ministers'' meeting to evolve consensus

The federal and provincial governments have decided to convene a meeting of finance ministers to evolve consensus on harmonisation of agriculture income tax policy in all the four provinces, it is learnt. Sources told Business Recorder the decision to this effect was taken at a meeting of provincial finance secretaries presided over by the Federal Finance Secretary Wajid Rana and Special Secretary Finance Rana Asad Amin.
The meeting of provincial finance ministers would be presided over by Advisor to the Prime Minister, Dr Abdul Hafeez Sheikh on the issue and the date of the meeting would be finalised later. On the issue of 1 percent collection charges, the meeting decided that any decision to this effect would be taken after working out actual cost of the collection. The provinces had pointed out during the biannual meeting to monitor the implementation of the National Finance Commission (NFC) Award held on December 16, 2011 that the federal government has been deducting 2 percent from the divisible pool instead of 1 percent collection charges agreed in the NFC.
An official said cash balance position of provinces has improved after receiving their share from the Federal Board of Revenue collection up to December 2011, but it would remain to be seen whether the provinces would be able to give budget surplus estimated in the overall fiscal deficit for the current fiscal year.
The meeting also discussed the measures required to be taken in the coming budget to increase tax base by bringing taxable people into the tax net. Meanwhile, Advisor to Prime Minister on Finance Dr Abdul Hafeez Sheikh presided over a meeting of the high-ups of the FBR to give them guidelines on the budget for the next fiscal year. The Advisor was quoted as underlining the need to broaden the tax base by bringing all those not taxed into the tax net. He said the only three taxes - income tax, sales tax and custom duty - should be the taxes for future. He directed the FBR officials to bring all the unjustifiable income into the tax net. Hafeez said wealth of the people has increased considerably during the last two years and the FBR should not only rely on serving notices to the wealthy but also pursue the cases and plug loopholes in the system.
The advisor said there is a huge potential of tax in the country and the tax collection machinery required to be upgraded and system should be improved in such a way that no one could hide his wealth. Hafeez said the performance and result of the FBR must be visible and merely not confined to the brainstorming sessions or the briefings.