Islamabad  - Finance Minister Senator Ishaq Dar on Thursday said that hard time for Pakistan’s economy is almost over due to efforts of present government’s economic team.

“With a tax-to-GDP ratio of around 9%, Pakistan ranks as one of the lowest tax collecting countries. Our government has embarked on an ambitious programme of annual 1pc growth in tax-to-GDP ratio”, the finance minister said while addressing the Chief Commissioners at the Federal Board of Revenue (FBR) Headquarters.

Dar further said that Pakistan approached International Monetary Fund (IMF) to repay the installments of loans taken by the previous government of Pakistan Peoples Party. He said Pakistan’s public debt has doubled in last eight years. “There was a time in the country when international financial institutions like World Bank were hesitating to deal with Pakistan. However, things are changed since PML-N government assumed the charge,” he added. Talking about increase in tax-to-GDP ratio, Ishaq Dar said that government would broaden the tax base instead of imposing new taxes in the country. “Pakistan’s tax-to-GDP ratio currently stands at a meager 8.5% which our government has decided to improve,”he said, and added ‘we have an ambitious programme of annual 1% growth in this ratio’.

The finance minister said that FBR is one of the most important organs of the government, as most of the expenditures of the government depend upon the revenue collection of this department. Finance Minister appreciated FBR chairman and his team on their performance and announced that the revenue collection in first 8 months of this year is Rs 1348 billion as compared to Rs 1145 billion in corresponding period of last year. He said that we have witnessed 17.7% growth in revenue up to February 2014, which is reasonably good.

He said, for the purpose of performing their duties well, the chief commissioners and other officers have been selected on merit and are being isolated from external pressures. He added that in response we expect the chief commissioners to rise up to the challenges and give sterling performances.

The finance minister said, “In order to ameliorate the problems of small & medium entrepreneurs we have decided that their sales tax refunds must be paid immediately. While we appreciate the queue that has been established for sales tax refund, we will make this one time exception to facilitate the SME sector.”

Finance Minister directed FBR to clear Sales Tax refunds up to Rs.5 lacs within 3 weeks and refunds from Rs 5-10 lacs by April 15, 2014, subject to verification and due process. He said that it will benefit around 26,000 clients of the total 36,000 refund cases and the remaining large sum claims will be processed through queue system separately.

Ishaq Dar instructed the chief commissioners for putting in more efforts in order to develop Pakistan and make Pakistan prosperous in line with the vision of the Prime Minister. He concluded that there should not only be increase in the tax net but all the leakages must be plugged.

He said that corruption and malpractices would not be tolerated.

Chairman FBR, in his closing remarks, at the end of the ceremony, requested for the approval of the Finance Minister for signing MoU regarding adjustment of Sales Tax on services against Sales Tax on supplied goods with Sindh Revenue Board and Punjab Revenue Authority. With the approval of the Finance Minister, the MoUs were signed by Chairman FBR Tariq Bajwa, Chairperson Punjab Revenue Authority Iftikhar Qutab and Chairman Sindh Revenue Board Tashfeen Khalid Niaz. With the signing of these MoUs, a long outstanding issue regarding Cross-Adjustment of Sales Tax on goods and services levied by the federal and provincial governments has been settled.