ISLAMABAD - The PML-N government is mulling to bring amendments in law to empower Federal Board of Revenue (FBR) to purchase urban land at about 25 per cent over and above rates declared in transfer deeds in order to stop tax evasion.
Currently, the people involved in the real estate business drastically understate the value of their properties to evade taxes, charged by federal and provincial authorities. Therefore, the FBR is considering an option in the upcoming budget 2015-2016 to purchase the urban land at about 25 percent higher than the amount declared in the sale deed as per the collector’s rate. The move, if approved, would help in stopping the massive tax evasion in the property sector.
The FBR is also considering a proposal to levy tax on foreign remittances to control the tax evasion. The FBR would propose to eliminate the immunity provided to probe into any amount of foreign remittances sent to Pakistan through proper banking channels. The Section 111(4) of the Income Tax Ordinance, 2001 provides immunity from probe into any amount of foreign remittances sent to Pakistan through proper banking channels.
Meanwhile, the government would reduce the tariff slabs to six from exiting five in the upcoming budget 2015-2016, as it has already brought them down to six from seven in previous budget. Similarly, the maximum customs duty had been decreased to 25 per cent from 30 per cent in the previous budget, which would further reduce in the upcoming budget.
The government would tighten the noose around the non-tax filers in the upcoming budget by increasing the withholding tax rates in order to broaden the extremely low tax net of the country. Similarly, the government would reduce the taxation burden on the existing taxpayers by providing some kind of benefits. The FBR’s officers shared these tax proposals during the meeting of Senate Standing Committee on Finance and Revenue, which met under the chair of Saleem Mandviwalla. The FBR officials did not support the idea of a Senator of announcing tax amnesty scheme to whiten the black money, as they said this scheme had not produced desire results in past.
Earlier, Finance Minister Ishaq Dar informed the committee that Pakistan and Etisalat management are at loggerhead regarding due amount worth $800 million against privatization PTCL. The government had transferred all properties except 31 in favour of Estisalat management. Pakistan will give only 26 per cent amount of the 31 properties to Etisalat, as they owned 26% percent shares of PTCL, he said and added that proposal had not been accepted by them.
He informed that government would announce the budget 2015-2016 on June 5 and would approve it on June 22-23. The government would present the Budget Strategy Paper in cabinet meeting on May 26 for approval. The National Economic Council would meet on 1st June to approve the development projects including federal and provincial, he added.
Talking about the economic impact of the sit-ins, finance minister said that privatization of Oil and Gas Development Company Limited (OGDCL) was postponed in September last year, as the government planned to generate $850-$950 million from privatization.
Secretary Finance Dr Waqar Masood presented the Budget Strategy Paper before the Senate’s Standing Committee on Finance and Revenue. The government in Budget Strategy Paper 2015-2018 set the GDP growth rate target at 5.5 per cent for the year 2015-2016, 6.5 per cent for 2016-2017 and 7 per cent for 2017-18. The government has estimated to increase the foreign exchange reserves to $19 billion by the end of the outgoing financial year 2014-2015 and to $25 billion by 2017-2018. The debt to GDP ratio would be brought down to 55 percent by 2017-2017 from 63 percent of the ongoing year. The budget deficit target has been fixed at 4.3 percent of the GDP for the next financial year 2015-2016, which would be brought down to 3.5 percent by the end of the year 2017-2018.
Meanwhile, the Senate Standing Committee on Finance and Revenue has taken serious notice of the alleged involvement of the software firm ‘Axact’ in the fake degrees scam. Chairman Committee Senator Saleem Mandviwalla said that committee would thoroughly probe the matter, as it has earned a very bad name for the country. The committee also summoned Securities and Exchange Commission of Pakistan (SECP) and would hold a meeting on the matter soon.
Chairman said that committee would look into all aspects in detail and would formulate recommendations to streamline the affairs in the best national interests.