Upcoming budget will not burden taxpayers: Shaikh

Finance minister says new tax regime will be people friendly.

ISLAMABAD: Federal Minister for Finance Dr Abdul Hafeez Shaikh declared on Friday that the government would not put additional tax burden on taxpayers during the upcoming budget for the fiscal year 2012-13. “There will be no `unpleasant surprise’ that becomes worrisome for people,” the minister said while concluding a seminar on “Broadening of Pakistan Tax base: A harmonised strategy for revenue mobilisation.”  He added that the low-income bracket will not be taxed. Besides, he said that the government will make sure the tax regime is people friendly, as giving relief to the people is its ultimate goal. Shaikh stated that the seminar was held with an aim to share ideas for bringing harmony among provinces and federation and take measures for information sharing.

On the occasion, the minister praised the efforts of the Federal Board of Revenue (FBR) for its extraordinary efforts in the field of revenue collection. He said that there is a 24% increase in collections during the first 10 months of the current fiscal year against the corresponding period last year, an unprecedented increase. He said that despite this notable achievement, there is still room for improvement in direct tax mobilisation, sales tax on services, simplifying tax system and in projecting a better image of the FBR. He clarified that the government is not politically influencing the FBR and the organisation is autonomous.

Discussing the issues of provinces, Shaikh said that more resources were transferred to provinces following the 7th National Finance Commission award while the 18th amendment gave greater power to them.

He urged the federal, provincial and local governments to collect taxes according to their defined jurisdictions. The minister also announced formation of four working groups to help harmonise different issues between federation and provinces and devise a better strategy for the overall improvement of tax system.

The groups include the income tax group headed by Dr Anjum Naseem, sales tax on services group headed by Qaisar Bengali, automation group headed by Bashir Ali Muhammad and policy group headed by Dr Ayesha Pasha.

Speaking at the seminar, renowned economist Qaisar Bengali highlighted the importance for imposing capital gains tax on stock exchange as a permanent measure besides advocating general sales tax on land and imports.

He stressed the need for stopping de-industrialisation that has been taking place in the country besides introducing wealth tax.

Published in The Express Tribune, May 26^th, 2012.