The government said on Thursday that corporate tax has been reduced to 20 percent for foreign investors to stimulate the dismally low foreign direct investment in the country. Senior Member Tax Policy Federal Board of Revenue (FBR) Shahid Hussain Asad stated during the Senate Standing Committee on Finance that foreign direct investment has been very poor due to prevailing circumstances.
The government has offered relief in tax to the foreign investors to stimulate investment. Senate Standing Committee presided over by Senator Nasreen Jalil, however, termed the decrease in corporate tax for foreign investors to 20 per cent and maintaining 33 per cent for local investors a disparity and recommended that all investors, foreign and domestic, must be treated at par regarding corporate tax.
Senator Usman Saifullah said that the security situation and not the tax rate is a problem for the foreign investors. The committee also recommended that all the civil servants including FBR officials that are non-filers may be suspended till they are in compliance with Income Tax Laws. Shahid Hussain said that steps have been taken to bring into tax net people from real estate and anybody who purchases property worth over Rs 3 million would have to pay adjustable advance tax.
The senate Standing Committee has recommended that Federal Bureau of Statistics must not come under control of Finance Minister after the growth of 4.14 per cent announced by the government for the current fiscal year has been challenged by the independent economists. The committee also wanted the Finance Minister to explain the reasons for public debt to GDP ratio at 62 per cent of the GDP when it is required to maintain below 60 per cent of the GDP under the Fiscal Responsibility and Debt Limitation Act 2005. The committee also wanted the Finance Minister to specify the measures the government is taking to disallow acquisition of any new loan or issuance of guarantees after the FRDL limit of 60 per cent of the GDP has been crossed.
The Senate Standing Committee on Finance has unanimously recommended to the federal government to include Zhob city bypass project in the Public Sector Development Programme for the next fiscal year and establish a university in Zhob. The recommendations approved by the Senate Standing Committee on Finance for the next fiscal year budget would be compiled and submitted to the Senate for onward submission to the National Assembly for incorporation in the budget.