Govt expresses inability to cut sales tax to single digit

KARACHI: Finance Minister Ishaq Dar on Thursday said it is difficult for the government to cut sales tax rate to single digit.
Dar, addressing members and office bearers of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said they have to be ready to pay the cost for overcoming energy crisis.
Earlier, President FPCCI Mian Muhammad Adrees said out of 17 percent sales tax, the government is getting only five percent, while 12 percent is gone in settlement.
“We want to pay taxes and assist government if tax collecting machinery is fair and clear,” Adrees said.
He added that tax collection should be broadened and it should not be a burden.
Minister Dar said the work on 3,600 megawatts of power generation projects are under way. They will become functional by 2017, he added.
He said the government is in talks with China to initiate 14,600MW of power projects.
“We have eliminated terrorism at a larger scale and will further eliminate it. There will be no compromise,” he said.
“Operation against terrorists is not against any political party or any religious sect.”
Dar said billions of rupees were used to mitigate the effects of floods and to take action against terrorists.
He added that more money is needed for the rehabilitation of the internally displaced persons.
The minister said the exports should be 15 percent of gross domestic product.
He added that there is a zero percent duty on products worth Rs1,200 billion. The finance minister said reputation of Pakistan before international institutions is improving, adding that foreign investment is coming in the country.
He said fiscal deficit will be brought down to 4.0 percent of GDP in next one year, GDP will be brought up to 7.0 percent and industrial growth will reach 8.0 percent in next three years.
He added that tax to GDP ratio should be increased to 15 percent from 11 percent.
Dar assured the business community of their inputs in the upcoming budget. He said the computerised national identity card will be considered as national tax number from July 31, 2015.
Miftah Ismail, chairman of the Board of Investment (BoI), said Indus River has potential to increase power generation to 80,000MW from the current 10,000MW.