Tax exemptions to the rich nearly double
Country sustains a loss of Rs477 billion in the outgoing fiscal year on account of tax exemptions to industrialists
Tax exemptions to the affluent segment of society nearly double. CREATIVE COMMONS
ISLAMABAD:
The country sustained a loss of a Rs477 billion in the outgoing fiscal year on account of tax exemptions granted to affluent segments of society almost 100% more than the previous year.
The first thorough study of tax exemptions, carried at the behest of the International Monetary Fund, showed the actual cost of tax concessions industrialists have been enjoying over the years but the Federal Board of Revenue chose not to bring the findings to light.
The findings of the study have now been published in the Economic Survey of Pakistan 2013-14. Earlier, the FBR used to give nominal amounts of sales tax exemptions, which have now been disclosed to a large extent.
According to the Economic Survey of Pakistan 2013-14, tax exemptions given in the outgoing fiscal year were Rs237.5 billion or 99.3% higher than the preceding year. In the last fiscal year, the government had estimated the cost of exemptions at Rs239.5 billion.
More than half of the exemptions were given in sales tax during the outgoing fiscal year. The share of sales tax exemptions was 15.7% in the total exemptions in the previous fiscal, showed the Economic Survey.
“The cross-section discussions have been completed and the government is going to withdraw a significant part of the exemptions in the new budget,” said Finance Minister Ishaq Dar while addressing the media at the launch of Economic Survey.
When asked about alleged resistance against the removal of exemptions by members of the influential textile industry, Dar said the government is simply trying to take consult stakeholders of the sector.
Huge exemptions coupled with rampant corruption in the Federal Board of Revenue kept the country’s tax-to-GDP at almost last year’s level.
Sales tax exemptions that stood at Rs37.5 billion last year, rose by 564% to Rs249 billion this time around after the FBR for the first time brought on record the tax exemptions enjoyed by many well-connected sectors of the economy.
Out of Rs249 billion, an amount of Rs94 billion was lost due to exemptions given to many industries under Statutory Regulatory Order 549 of 2008.
The country sustained a loss of a Rs477 billion in the outgoing fiscal year on account of tax exemptions granted to affluent segments of society almost 100% more than the previous year.
The first thorough study of tax exemptions, carried at the behest of the International Monetary Fund, showed the actual cost of tax concessions industrialists have been enjoying over the years but the Federal Board of Revenue chose not to bring the findings to light.
The findings of the study have now been published in the Economic Survey of Pakistan 2013-14. Earlier, the FBR used to give nominal amounts of sales tax exemptions, which have now been disclosed to a large extent.
According to the Economic Survey of Pakistan 2013-14, tax exemptions given in the outgoing fiscal year were Rs237.5 billion or 99.3% higher than the preceding year. In the last fiscal year, the government had estimated the cost of exemptions at Rs239.5 billion.
More than half of the exemptions were given in sales tax during the outgoing fiscal year. The share of sales tax exemptions was 15.7% in the total exemptions in the previous fiscal, showed the Economic Survey.
“The cross-section discussions have been completed and the government is going to withdraw a significant part of the exemptions in the new budget,” said Finance Minister Ishaq Dar while addressing the media at the launch of Economic Survey.
When asked about alleged resistance against the removal of exemptions by members of the influential textile industry, Dar said the government is simply trying to take consult stakeholders of the sector.
Huge exemptions coupled with rampant corruption in the Federal Board of Revenue kept the country’s tax-to-GDP at almost last year’s level.
Sales tax exemptions that stood at Rs37.5 billion last year, rose by 564% to Rs249 billion this time around after the FBR for the first time brought on record the tax exemptions enjoyed by many well-connected sectors of the economy.
Out of Rs249 billion, an amount of Rs94 billion was lost due to exemptions given to many industries under Statutory Regulatory Order 549 of 2008.