ISLAMABAD - Deliberating on budget proposals for the upcoming financial year 2011-12, the Tax Reform Coordination Group (TRCG) recommended that tax base should be broadened, documented and gradual shift away from presumptive tax regime with increase in rate for presumptive tax regime towards eventual reduction in tax rate under normal tax regime.  

Advisor to the Prime Minister on Finance and Revenue Dr Hafeez Shaikh has chaired the meeting of Tax Reform Coordination Group (TRCG). During the meeting, FBR performance was reviewed and budget proposals were deliberated on. TRCG discussed proposed changes in implementation of Capital Gain Tax aimed at simplifying the mechanism, improvement in its enforcement and broadening of tax base. The Committee formed an “Implementation Group” consisting of TRCG members, FBR officials and SECP representatives to ensure implementation in line with the law.

Revenue performance of the Federal Board of Revenue (FBR) was also reviewed in detail. Chairman FBR, Mumtaz Haider Rizvi apprised the Group of taxes collected under various heads and administrative measures taken till date and the way forward for remainder of financial year 2012. The TRCG was apprised that up to February 22, the tax collection stood at Rs. 1,068 Billion, which is 26 percent higher than the collection of Rs 847 Billion in the corresponding period of the previous fiscal year.

Earlier, Dr Hafeez Shaikh, while addressing the meeting, said that the guiding principles of the forthcoming Federal Budget should be to continue with the approach of simplification of taxes, avoidance of increase in taxes or the rates of taxes, fiscal incentives for growth and generation of investment and employment.

He emphasised the need for an accelerated drive for direct tax collection while providing relief for the existing taxpaying citizens.

The TRCG members who attended included Deputy Chairman Planning Commission, Dr Nadeem-ul-Haq, Chairman, Securities and Exchange Commission of Pakistan (SECP) Muhammad Ali, Tax Reform Core Group Members Abdullah Yousuf, Arshad Zuberi, Shabbar Zaidi, Ashfaq Tola, Ali Jameel Yousuf and Mohammad Arshad Chaudhry. Similarly high officials of the FBR were also present in the meeting.