ISLAMABAD - Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh on Tuesday termed the annual tax collection target of Rs 4.63 trillion for next fiscal year as ambitious, which would be collected once country’s economic activities accelerate after Covid-19.

Address a post budget conference arranged by ICAP, he said that government has announced the budget 2020-21 amid providing relief to the people and businessmen.

He further said that government has not increased any tax in the budget, which happened for the first time in country’s history. The government has taken the decision for not putting additional burden on existing taxpayers as economy contracted due to Covid-19, he said.

Instead of new taxes, he informed, the government has provided relief to the people and businessmen in the budget.  Giving a breakup of the relief given in taxes, the Adviser said regulatory duty on 1,623 tariff lines of raw materials are totally being done away. Similarly, the government has reduced regulatory duty on semi finished raw materials.

FBR tax collection went upto 17 pc

He further said that government has reduced Federal Excise Duty (FED) on cement from Rs 2 per kg to Rs1.75 per kg. The duty on hospitality sector is being reduced from 1.5 per cent to 0.5 per cent, he added.

He said taxes and duties are being abolished on the testing kits of coronavirus and cancer.

Talking about the expenditures, Hafeez Shaikh said that government has not increased the budget of civil government and military budget in real terms. However, the government has increased the development budget by Rs 100 billion to Rs 650 billion and also enhanced the budget for Ehsaas programme.

He hoped that government would achieve the GDP target of two per cent in next fiscal year after business activities starts up.

However, he said that achieving GDP target would depend on national and international situation amid Covid-19.

He explained that economic situation had improved before the Covid-19 situation.He informed that incumbent government had spent Rs 5 trillion on interest payment on loans taken by previous government. Tax collection of Federal Board of Revenue (FBR) was impressive, as it went up by 17 per cent, he added.He further said: “The government was expecting to collect Rs 4.5 trillion taxes before Covid-19.