Incentivising taxes: Nawaz introduces packages for businessmen, investors

Published: November 28, 2013
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Prime Minister Nawaz Sharif (L) addresses the business community in Islamabad on Thursday with the Finance Minister Ishaq Dar (R) in attendance. PHOTO: PID

Prime Minister Nawaz Sharif (L) addresses the business community in Islamabad on Thursday with the Finance Minister Ishaq Dar (R) in attendance. PHOTO: PID

ISLAMABAD: With much of the government’s efforts to increase tax revenue yielding little to no result, Prime Minister Nawaz Sharif resorted to announcing incentive packages for the business community, and tax payers on Thursday afternoon, Radio Pakistan reported.

During his address to businessmen and traders in Islamabad, he said that the government would forego the requisite requirement of asking for the source of investment, if they are made in the government’s green field projects or expansion projects in certain sectors after January 2014. Standard regulations under Narcotics Act of 1977, Anti-Terrorism Act of 1977 and the Anti-Money Laundering Law will still be applicable to curb inflow of black money.

He told the business community that he “hopes to make it possible that the country’s policies are approved by [businessmen and traders],” Express News reported.

The incentive scheme is being extended to the investment starved Thar coal project, and low cost housing schemes – a manifesto promise of the incumbent government. A negative list of industries, to which these incentives will remain inaccessible, include ammunition, weapons, fertiliser, sugar, cigarettes, beverages, textile spinning units, ghee, flour mills, cement and edible oil mills.

“We are far behind other countries… so far behind that we are mentioned amongst the lowest countries in the world,” Express News reported Prime Minister Nawaz Sharif as saying on Thursday.

“I hope that the spirit of nationalism will rise in all of you and that you will pay your taxes,” he added.

Tax awards

Nawaz also announced plans to reward those people who have been diligently filing their taxes.

The premier said that in order to encourage tax payers a ‘Privileged Tax Payers Cards’ would be issued to 400 top tax payers in different categories including chief executive officers, association of persons, salaried and non-salaried class tax payers.

The card will grant a holder access to VIP lounges at airports, fast track immigration‚ passports would be issued gratis and their existing baggage allowance would be increased from $500 to $5,000 from March next year.

The prime minister said excellence awards will also be given to ten top most tax payers in each category and he himself would be hosting annual dinner in their honour.

Nawaz added that announced tax returns of all those who have paid at least 25% tax more than they did the year before will now be exempt from total audit. For this purpose‚ the last date for filing of tax returns was being extended to December 15, 2013. Those who have already filed their returns can also avail this facility by revising their returns.
The premier said tax returns of those who have been filing for the last five years would also be exempt from audit, provided they pay at least Rs20,000 in tax.

Those acquiring NTN for the first time would be exempt from penalty and default surcharge provided they pay at least Rs25,000 tax.

Special incentives would also be available to ten top most tax payers from among the new tax payers.

Foreign tours

The premier has recently been travelling around the world to discuss bilateral trade with heads of state.

Earlier this month, while addressing a group of Thai and Pakistani businessmen in Bangkok, Nawaz had said that he strongly believes that promotion of bilateral regional trade was an effective way to promote sustainable economic growth.

He had said that Pakistan was pursuing a policy of enhanced regional cooperation through various trade agreements, adding that the top priority of his government was to create a framework that would foster rapid economic development.

The premier had added that Pakistan is an emerging economy and a gateway to Afghanistan, Central Asia and the Middle East. He had said that the regional countries could help each other by reaching markets that are not easily accessible.

He had mentioned the country’s free trade agreements with China, Malaysia and Sri Lanka, adding that the government was looking to Pakistan’s entry into the GSP plus Scheme of the European Union.

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Reader Comments (24)

  • Xnain
    Nov 28, 2013 - 6:45PM

    I guess incentives to small taxpayers should also be available since most of the working population in this country lies in lower to middle income bracket. Perhaps attaching some generic benefits to one’s tax cards can help the government increase the tax base. But nonetheless, a good beginning, hope it proves worthwhile.

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  • Acorn Guts
    Nov 28, 2013 - 7:02PM

    ‘Privileged Tax Payers Cards’ to top 400 taxpayers that gives them all those benefits? Well, those top 400 can ‘afford to pay’ for all those ‘benefits’ out of their own pocket without batting an eyelid .. so what is the incentive here? who’s coming up with all this faff?

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  • Ali
    Nov 28, 2013 - 8:03PM

    What?!? Mind = blown

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  • Rao
    Nov 28, 2013 - 8:12PM

    Sir, entire nation is paying tax.
    Please ask to the parliamentarian to pay their taxes.

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  • Wellwisher
    Nov 28, 2013 - 8:27PM

    Great Job, Even though i am not a nawaz sharif supporter

    First time after decades we are seeing some good relaxation and benefits for the common people. This step will definitely encourage investments and businesses increasing employment opportunities!

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  • Wellwisher
    Nov 28, 2013 - 8:28PM

    @Acorn Guts:
    please appreciate when a good step is taken. Something is better than nothing

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  • Pakistani1
    Nov 28, 2013 - 8:34PM

    Pls increase this number from 400 to a larger number, Pakistan is a big country.

    Also provide useful benefits to the less earning working class as this will increase the no. of taxpayers in the country.

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  • aaaaa
    Nov 28, 2013 - 8:40PM

    @Rao:

    800,000/180 million people pay tax. Not even 1%, let alone the entire nation.

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  • Jibran
    Nov 28, 2013 - 8:56PM

    First, you start paying taxes. Ask your son, relatives, and those of your Ministers to bring back the money they stole from Pakistan, and invest in Pakistan. Also ask them to pay taxes.

    Second, payback the loans you and your family defaulted on, with interest.

    Third, tax the traders, and the agriculturalists.

    Fourth, stop these gimmicks of “privileged Tax ID cards”. It is not going to work, unless it’s tailor made for you and your cronies to turn black money into white.

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  • A-No.1
    Nov 28, 2013 - 9:09PM

    More money to be made by some.

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  • salman
    Nov 28, 2013 - 9:41PM

    So this is what the “best economic team” of pmln could come with? What a joke….

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  • Muhammad Waqar
    Nov 28, 2013 - 9:44PM

    Exemptions and benefits to businessmen, nothing for the common man. Keep it up Nawaz Sharif.

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  • Muslim Leaguer
    Nov 28, 2013 - 10:00PM

    This is a good approach to encourage honesty and enhance income & employment opportunities in Pakistan.

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  • Constant Pakistani
    Nov 28, 2013 - 10:40PM

    For the first time, some respect to those who pay your bills. Learn PPP feudal lords, learn.Recommend

  • Xnain
    Nov 28, 2013 - 11:04PM

    @Rao:
    “Sir, entire nation is paying tax.”
    Quick Question, if the entire nation is paying tax then why do we have Tax/GDP hovering around 7-8%? Yahoodi Sazish?…..Duh!Recommend

  • Xnain
    Nov 28, 2013 - 11:07PM

    @Jibran:
    Since you’ve reminded us that charity begins at home.He has been paying more than 2 million as Income tax every year. How much do you pay?
    link textRecommend

  • Nov 28, 2013 - 11:24PM

    @Muslim Leaguer:
    You baffled me with your statement.
    Either you are payed or you lack the foresight of the current circumstances.
    You must understand that the design of this scheme is to further benefit the industrialists.
    They will get waivers and facilities for their taxes. So indirectly, this results in “LESS” revenue for the country. It is imperative that one also looks at certain steps from a bird’s eye view to understand the effectiveness of a method.
    Employment opportunities will never increase this way. Tax cannot be related to employment. Infact when the government takes foolish steps, taxation results in loss of employment.
    Rest assured, if you are willing to see through, the current IMF loan taken by this government will decimate all the other methodologies they have adopted to create employment. Right now coming up with accurate figures is not possible but do not forget that the IMF loan’s report clearly stated that the loan will further increase unemployment for 1.2m people. It will drop the rupee to around 130 to the USD.
    Our current rulers are not there for us. If they were, their immediate steps wouldn’t have been over-taxation of the middle and poor class.
    On the other hand if the government had decided to REDUCE taxes and then started a crackdown of evaders, it would have been more beneficial. Because obviously someone earning Rs. 50, 000 would rather pay Rs. 2000 in tax and be legit rather than Rs. 10,000.

    The incumbent government doesn’t have a vision at all. Their strategy is only and only to tax poor and middle class, introduce new indirect taxes, so that there is a slave class and an elite class.
    Someone with proper foresight will find the root of tax-evasion, why do people evade? Are the taxes too much? Why are they too much? Should they be this much? How can I streamline the taxation methods and work on modals which encourage and not discourage the local man from paying taxes?

    Incentives to top tax payers is a bogus method. What is the fault of someone who has a small business but is paying 100% of his share of taxes. Doesn’t make sense.
    If you see through, Sharifs and Dars are nothing but liars, spineless and cunning pawns forcing my labour-class to sell organs for food.
    – Respect.Recommend

  • A cd
    Nov 28, 2013 - 11:24PM

    It’s a start in the right direction. Give all tax payers relief in the form of roads, legal protection, law enforcement, health, education, jobs and good governance….and above all…the one thing that our country demands of us for a better future…acceptance of merit!Recommend

  • Nov 28, 2013 - 11:39PM

    @Xnain:
    Good, you are linking your comments with official links.
    But I have another question which I do not know the answer of. Since you might be a Nawaz supporter you might be keeping tabs.
    Wikipedia states Nawaz’s wealth is around $1.8b. To accumulate this amount, and to consider the yearly taxation on the assets owned, I am thinking that it would be greater than Rs. 2m, it will be even more than Rs. 200m.
    Having said that, you must also know that Wikipedia is not a reliable source. However, in figures that you might browse the web, Nawaz’s wealth will accumulate in the range of $800m to $2.5b. This is not including the assets he transferred to his kin.
    Even then his income tax return is too less. Both of us know that Raiwind Palace would have cost more than 1b rupees.
    Xnain, Nawaz didn’t spend so much on his campaigns to come to power to facilitate us.Recommend

  • Sandip
    Nov 28, 2013 - 11:51PM

    The Pakistani spirit of nationalism awakes when someone else foots the bills for the the boys. That’s when the boys make sure that they use all their agents in the media to rile up nationalist fervor. For something where the boys would have to fork out money (since all of them are now millionaires many times over), it doesn’t cut much ice with the.

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  • Xnain
    Nov 29, 2013 - 11:13AM

    @The Failed Rebel:
    Income and wealth are two different economic and taxation concept. Accumulated income over time is called wealth……That’s why income tax and wealth tax are two different things.No rocket science.

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  • Pak10
    Nov 30, 2013 - 5:19AM

    @Sandip:
    meanwhile indian & hindu nationalists spread hate comments on pakistan to express their nationalism

    Recommend

  • Imran
    Nov 30, 2013 - 10:53AM

    Thats good step for Pakistan Economy.

    keep on touch

    Recommend

  • Sandip
    Nov 30, 2013 - 11:21PM

    @Pak10: When you want to escape logical scrutiny, start labeling it as enemy propaganda, hate speech etc. That’s so easy as one doesn’t have to use brains to create logical arguments.Recommend

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