WEDNESDAY APRIL 11: Hafeez spells out four key points: no new tax and hike in tax rates

KARACHI: Unveiling four key points of the next budget - economic stability, self-reliance, reduction in unemployment, inflation and poverty reduction - Finance Minister Abdul Hafeez Sheikh on Tuesday announced that the government would not impose any new tax or increase tax rate in the 2012-13 budget.
Talking to newsmen at 28th Corporate Excellence Award ceremony of the Management Association of Pakistan (MAP) here, the minister said we are trying to further simplify tax collection and reduce interaction between the FBR and taxpayers to minimise the element of corruption and increase real tax collection.
"We don't have any plan to introduce any new tax or increase the current tax rate in the next fiscal year's budget," he said. However, he said public problems can be resolved through increase in the tax collection, hence measurers will be taken to broaden the tax net.
The minister said that with the efforts of present government, the country has come out of crisis and now the economic stability is more important than anything else. Talking about the main features of the next budget, Dr Hafeez said major issues such as economic stability and unemployment will be addressed in the next budget.
"Economic stability is the government's first priority and it's also the key point of next fiscal year's budget, while self-reliance is also on priority," he added. Reduction in unemployment and inflation will be the third key point of the forthcoming budget. Poverty reduction through different schemes such as Income Support Fund is the fourth key point of the budget.
The government is taking several measurers to reduce unemployment in the country and several new resources will be created for job opportunities in the country, he added. "We had allocated some Rs 50 billion under income support fund in the current fiscal year budget to support the poor masses and this year as well we are allocating a healthy amount to reduce poverty," the minister said and added that with this allocation, health insurance, soft loan and cash support will be provided to poor families.
Some steps are under consideration to broaden the tax net and under these considerations wealthy people will be brought to the tax net in the coming budget. However, the government will try not to further increase the tax burden on the existing honest taxpayers.
He said increase in tax revenue will enable the government to reduce its borrowing besides undertake new development schemes such as dams, infrastructure improvement and clean drinking water. Earlier, addressing the ceremony, Dr Hafeez said sales tax refund system has been centralised and now it is presenting excellent performance. During 2009-10, some 22,000 worth Rs 25 billion cheques were distributed while, after automation, some 55,000 amounting to over Rs 50 billion cheques were issued in FY11.
The government has already taken several bold steps to enlarge tax net and five zero-rated powerful sectors have also been brought into the tax net by imposing levy on their local sales. Dr Hafeez said tax collection is gradually improving and during the first nine months (July-March) of the current fiscal year, the FBR has achieved a recorded growth of 25 percent over last year.
Several irregularities have been identified in the tax collection and recently the FBR collected Rs 4 billion from 'influential' who tried to evade input tax, he added. The government is facilitating the private sector, which can play a vital role in the development of the country, he said and added that the economy is improving gradually and during last year, the country achieved $23 billion exports, while average monthly remittances have crossed $1bn mark.
The government is also giving autonomy to the different institutions and now there is no interference in the monetary policy and the SBP, itself was taking a decision on the key policy rate, he pointed out. On the occasion, Kamal A Chinoy, President MAP, Syed Masood Hashmi, Chairman Corporate Excellence Award sub committee MAP, Ms Saadia Naveed Vice President, and Sarfraz A Rehman honorary secretary MAP also addressed. The Finance Minister also distributed trophies, awards and certificate among the outstanding corporate entities on their financial and management performances.