ISLAMABAD - The Tax Advisory Council on Saturday met to discuss the budget proposals wherein representatives of trade bodies recommended enhancing federal excise duty on luxury items like electronics and cigarettes but decrease the GST rate.
The Council met under the chair of Finance Minister Senator Ishaq Dar and a participant of the meeting quoted the minister as saying that government would neither increase the tax rates nor impose new taxes in the budget. However, the government would enhance the tax base of the country.
But experts say the PML-N government has no option but to rely on heavy taxation measures as well as withdrawing tax exemptions in upcoming budget 2014-2015 to achieve annual tax collection target of Rs2,800 billion.
The Federal Board of Revenue (FBR) would require additional taxation measures of Rs230 billion during next financial year to achieve that target. A source in the FBR informed that the government would make Rs2,275 billion as base and Rs 295 billion would come from nominal growth.
The source added that government would withdraw the tax exemptions worth of Rs150 billion (0.6 percent of the GDP) in next fiscal year. He was of the view that government might take additional taxation measures worth of around Rs80 to Rs100 billion in the budget.
Sources informed The Nation that the meeting of Tax Advisory Council (TAC) was attended by FBR officials, chartered accountants, academia, senior tax consultants, retired senior officers, industrialists, presidents of chambers of commerce and trade, President Tax Bar, and representatives of professional associations like ICAP and ICMA, SECP, Pakistan Banking Association, KSE, LSE and ISE.
The finance minister said that economic recovery is the top priority of the PML-N government and with the introduction of reforms during the last ten months the economy has been put on the right direction. Now with the hard work, commitment and dedication, all the economic indicators are on the upward trajectory, he added.
He said that they believe in consulting all stakeholders in the process of budget making. He informed the traders that today (Saturday) he suspended implementation of SRO 351 of 2014 which was issued by FBR without his approval and was unfair in its spirit.
Dar further informed the traders that all discriminatory SROs will be abolished in a period of three years and all the stakeholders are working together in this regard. The minister emphasised formulation of realistic proposals aimed at ensuring growth in the economy and revenue generation enabling the government for appropriate allocation in development sector and social safety net.
The business representatives discussed in detail their issues and recommendations. They appreciated the work being done by the finance ministry and the FBR for SROs rationalisation. The trade representatives appreciated finance minister’s sincerity, hard work and dedication for the uplift of economy. The traders also appreciated his personal interest in sales tax refunds up to rupees one million. There was a general sense of satisfaction on the economic policies of the government and expectations that strengthening of rupee would bring positive impact on the country.
The finance minister said that transparency, merit, openness and good governance remained hallmark of the PML-N government and resolved to make every effort possible to facilitate the traders on their reasonable demands while keeping in mind the national interest for taking the country forward on way to development and progress.