Revenue collection to rise up to Rs5.8tn in FY22: Tarin

Govt to incentivise productive sectors including agriculture, services and industry

ISLAMABAD: Finance Minister Shaukat Tarin has said that the Rs4.8 trillion revenue collection this year would be the highest in the country’s history whereas the government is hopeful to collect around Rs5.8 trillion during the next fiscal year 2021-2022 (FY22).

He explained that the government will add Rs1 trillion revenue through innovate measures such as linking the Points of Sales (POS) to the Federal Board of Revenue’s (FBR) system and ending harassment by tax officials.
“Only 80,000 POS’ have been linked with FBR; we have a plan to increase this to 500,000 in next years. The government would come up with a prize scheme for those who pay sales their taxes through POS. This would help increase the addition of GST to tax collection by a considerable amount,” he said.

Addressing a webinar titled, “Budget 2020: Balancing Stability and Growth” organised by Institute of Policy Reforms (IPR), the minister while stressing the need to focus on economic growth said the government had already constituted Economic Advisory Council (EAC) to evolve development strategies with the help of experts to ensure sustainable growth of about 12 different sectors.

He said that since the government lacked resources to invest in the growth of all sectors, it had decided to focus on 12 major areas, which would put the country on the road to “inclusive and sustainable growth” whereas the EAC has been directed to identify factors that hampered long-term economic growth in Pakistan.

“What we want is inclusive and sustainable growth over a long period of time,” he said, regretting that Pakistan had never seen a long period of sustainable growth except in the 60s.

Article continues after this advertisement

Tarin regretted that currently the revenue collection was less than 10 per cent of the Gross Domestic Product (GDP).

“Because our exports are not keeping pace with our overall growth, we fall short of dollars. Never have we gone for a tailspin for any other reason than the balance of payments,” said Tarin, referring to the constant balance of payments crisis that pushes Pakistan to knock at the doors of the International Monetary Fund (IMF).

The federal finance minister said that the government is going to incentivise productive sectors including agriculture, services and industry.

“There is a need to make the industry more efficient so that exports can be enhanced. Pakistan, unfortunately, was converted from a food-exporting to a food-importing country; so, the government’s focus would be on reversing this trend.” he informed.

Tarin said there was also need to focus on all agriculture chains, adding that a progressive plan was being put in place with a number of incentives for agriculture reforms.

He said that there was also a need to control food inflation by adopting a mechanism to curb the practice of taking huge margins by playing middle man. “Administrative control will be strengthened, but more importantly, the government will have to consider bringing back price magistrates, which had been removed during the former military ruler Gen (r) Pervez Musharraf.

The finance minister said that a “bottoms up approach” would prove successful in eradicating poverty.

“We will also incentivise services sector such as housing and e-commerce and value-addition, and explore new areas of exports including motor parts, three-wheelers, motorcycles in the next budget. This has to be done to ensure exports grow.”

“Similarly, we want to incentivise the IT sector. I have a meeting, and we will look to put an end to FBR’s harassment of the IT sector,” he said, adding that he looked forward to seeing IT exports increase from the current $2 billion to $8 billion by 2023.

Speaking further about FBR, the minister said that the government would announce a universal self-assessment system and a third party audit for three to four per cent of the population would be carried out on risk basis.
In addition, the government will establish a technology based data cell through which the tax department can take action against defaulters.
Regarding Special Economic Zones (SEZs), the finance minister said the government has decided against applying a 1.5 per cent turnover tax on SEZs in the next budget in a bid to
increase exports as there is dire need to bring foreign direct investment (FDI) in the export sector.
“Exports, exports, exports. That is the mantra,” he said.

 Regarding the Public Sector Development Programme (PSDP), the finance minister said the government planned to spend Rs650 billion on it this year, while he aimed to increase the spending to Rs900bn next year.

“But it will have to be efficient and since the planning commission has started public-private partnership initiatives, Rs900bn will have a greater impact on the ground,” he added.

He also said that circular debt is a major issue and the government would be introducing innovative ways to tackle this challenge as capacity payments would be increasing Rs1.45 trillion per annum in the coming years. “Due to past contracts, the government is paying for unproduced and unutilised electricity but the prime minister does not want the price of electricity to increase as people are already heavily burdened”.

However, stressing the need for bringing stability in the power sector, he said that certain incentives would be withdrawn in the upcoming budget.

“We are not going to introduce new taxes, but only remove incentives being given to people we believe have been receiving the incentives for no rhyme or reason,” he said.

Moreover, Shaukat Tarin opined that he would love to have a charter of the economy and would be meeting Prime Minister Imran Khan to seek his permission to reach out to the Pakistan People’s Party (PPP) and Pakistan Muslim League-Nawaz (PML-N).
“There is a political will to make changes this time. Prime Minister (PM) Imran Khan has assured me of this. The political apparatus will be involved, and reforms would be inclusive,” Tarin said.
- Advertisement -

1 COMMENT

  1. What are the hurdles in enforcing Point of Sales policy? There are BIG names in every single city that bring in millions per day in cash. And God knows how much tax is paid on that. Just visit one or two top clinics in big cities and any tax auditor can easily see how much revenue is being generated there.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Must Read

Taxpayers advised to pay taxes till Sept 30 to get special...

RAWALPINDI: The Excise and Taxation Department has offered a 10 per cent rebate and 5pc discount on the token tax payment if a taxpayer...