ISLAMABAD ( Web News )
Terming the hue and cry over supplementary finance bill as totally unjustified, Minister for finance and revenue Shaukat Tarin Thursday said the government had proposed to review tax exemptions of Rs 343 billion in the supplementary finance bill, 2021 out of which Rs 272 billion taxes were refundable or adjustable, while the rest Rs 71 billion tax exemptions were about luxury items.
“We are not putting extra burden on common man as only Rs 2 billion tax exemptions have been proposed on the items that can be related to the common man which would have a very negligible impact on inflation,” he said while addressing a press conference here after presenting the supplementary finance bill in the parliament.
The minister said the government was proposed to exempt Rs 112 billion taxes on machinery, and Rs 160 billion on pharma sector, and that too would totally be refundable or adjustable.
He said in the past, unjustified taxes were exempted on various items that were being withdrawn.
The minister was flanked by Minister of State for Information and Broadcasting Farrukh Habib and Chairman Federal Board of Revenue Dr Muhammad Ashfaq.
The finance minister said the main purpose of the supplementary finance bill was not to increase the revenues as the FBR was already ahead of its target of revenue collection, but the main purpose was documentation of various businesses and individuals.
“We have categorically told the businessmen and other professionals that they will not get any refund until they document themselves without their documentation,” he said adding that the approval of this bill would help expanding tax net as more people will start paying their income and sales taxes.
He said the Rs 272 billion tax exemptions on machinery and pharma sector would be refunded to them within seven days of claims or these taxes would adjusted against any other payable income or sales taxes.
He said a major portion of the rest Rs 71 billion tax exemptions were proposed on luxury imported items such as high-end bakery, fish, chocolates, and others.
While, he said only Rs 2 billion tax exemptions were being proposed for items that were related to common man such as computers. sewing machines, red chillies, match box, iodized salt and contraceptives.
During negotiation with the IMF, the minister informed that we defended not to tax the food and other essential items such as wheat, wheat flour, rice, vegetable, pulses, fresh fruit, milk, sugar cane and sugar, educational books, imported computers, laptops, imported plants for Special Economic Zonex, agriculture tractors, fertilizers, pesticides, used cloths, cinema equipments and others.
With respect to the IMF’ condition of giving autonomy to Central Bank, Shaukat Tarin said that it was part of the PTI’s agenda to empower the institutions to work without any pressure.
So there was nothing wrong with giving administrative autonomy the State Bank of Pakistan (SB), he said adding that one of the condition in the new SBP bill was that the government would not be able to borrow from the central bank.
“The incumbent government has not borrowed even a single rupee during past two and half years,” he said adding that the uncontrolled borrowing that was done by the past government, resulted in price hike and devaluation of the local currency.
The minister maintained that the government was only giving administrative independence to the SBP while the supreme authority would be in the hand of the Board that would be nominated and approved by the government itself.
He said the Board would recommend the names of governor and deputy governor to the government who would give final approval.
Further he said that the SBP would be answerable to the parliament and its standing committees.
He clarified that no constitutional amendment was being made as the Bill would only be passed with simple majority in the parliament that could also be reverted by the same process any time.
To a question, the minister said the tax on auto sector was nothing to do with the IMF, but new taxes were imposed on the imported cars only to control the balance of payment.
To another question, Mr Tarin said the tax exemptions would not impact the common man and inflation would not increase. He said Pakistan’s inflation rate was mainly driven by four major imported items including petroleum products, cooking oil, steel, and coal, the prices of which had gone up sharply in the international market. Once the prices of these commodities subsides in the international market, the inflation rate in Pakistan would also come down, he added.