Chances of taxing agricultural income from the new financial year dimmed on Tuesday when Finance Minister Dr Abdul Hafeez Shaikh turned down a demand by the business community, hiding behind the constitution that declares agriculture as a provincial subject.
Addressing representatives of the business community that met him to discuss framing of the new budget, in consultation with the International Monetary Fund, Shaikh said, “I believe that all incomes irrespective of the sources must be taxed but under the constitution, agriculture tax is a provincial subject.”
The finance minister boasted that the government had identified 700,000 new entities, which could be taxed and expressed hope that their inclusion would enhance the stagnant tax-to-GDP ratio, though he had recently showed reservations in this regard due to involvement of tax officials in evasion.
Shaikh emphasised the need for private sector’s role, labelling it an engine of growth in an open society. “In Pakistan, the private sector has been playing a positive role and the government has called this forum to accumulate various suggestions in order to strengthen the sector’s role in developing the economy.”
He added that the government was communicating with all segments of the corporate sector to devise a mechanism for broadening the tax base.
On a representative’s reservations about the tax refund system, he informed that since September 2009, the government had issued over 50,000 cheques, amounting to over Rs40 billion under a computerised programme of the Federal Board of Revenue.
“The government is still trying to make this tax refund system more transparent and machine-operated instead of manually-operated,” he added.
Shaikh said the government has almost overcome the expenditure overrun and urged the business community to come up with concrete and practical suggestions in this regard, so squandering of national wealth could be avoided and the funds be allocated for further economic development.
Published in The Express Tribune, April 27th, 2011.
COMMENTS (7)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ