Amnesty scheme must levy more than 20% tax
Islamabad: ANP ex-Senator Ilyas Ahmed Bilour has said that there should be minimum 20 per cent tax rate for non-filers and tax evaders as 5 per cent tax return is very low and should not be passed.
Mr Bilour was speaking at a special seminar on ‘Post Budget (2018-19) overview and analysis’ organised here by Sustainable development Policy Institute (SDPI).
Bilour who is also a former Chairperson of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that making amnesty scheme a part of the finance bill was a wrong decision to avoid its rejection in the Senate. He said that it is black and not the white money taken out of Pakistan and those doing this must be charged with high tax percentage. He further said that this budget is going to increase the prices in the market and will hurt poor the most.
Dr Pervaiz Tahir, former Chief Economist, said that the big challenge for the future governments is to sustain and build upon the growth rate of 5.78 per cent amid huge fiscal and current account deficits. He said that in his assessment, this time Pakistan may not go to IMF to meet its development expenditures as the government hoped to collect maximum revenues from the amnesty schemes. To roll back the populism factor from the budget would be very difficult for the next government, he observed.
He said that Federal Board of Revenue is beyond repair as it collects less revenue than its own expenditures. What’s the point in having such loss-making organisation, he asked. He said FBR is not the Federal but national agency and its targets should increase the number of tax filers, not revenues.
Dr Abid Qaiyum Suleri, Executive Director, SDPI, said that the incumbent government has presented a deficit budget with increased expenditure as compare to the previous one. He said that after spending on three non-discretionary expenditures mainly debt, defence and day-to-day government expenditures, the government may left with least revenues and more development expenditures, which would further widen the fiscal deficit with no choice but to go for IMF programme if it failed to manage resources to finance the development expenditures till June this year. He said that our GDP growth rate was not correctly captured and we need to rebase our GDP growth where Uber, Careem, Zameen.com, Daraz.pk and other dozen of services were not captured in GDP formula.
SDPI Joint Executive Director Dr Vaqar Ahmed said that it is good sign that Pakistan’s economy witnessed growth on the back of CPEC. The past two quarters were also seen an uptick in exports. He said distortions in the tax regime can be addressed through Budget 2018-19. He stressed the need to reduce number of withholding taxes which in essence act as regressive indirect taxes and the corporate tax regime required to be simplified.
He proposed merging all duties including para-tariffs, additional customs duties and regulatory duties to correct distortions created by customs duty laws. He lamented that the effective indirect taxes faced by agriculture are still higher in comparison to peer economies. He said the fiscal policy should be formulated in a manner so that Pakistan grow without accumulating more debt, economic growth translates into exports competitiveness and growth is led by investment and not consumption expenditures.