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June 15, 2019

Finance adviser terms Rs5.5trln revenue target achievable

Business

June 15, 2019

KARACHI: Adviser to the Prime Minister on Finance Hafeez Shaikh on Friday vowed to bring all the taxable income into the tax net to achieve the mammoth revenue target of Rs5.5 trillion during the next fiscal year.

“Though it is a difficult task it has to be achieved,” Shaikh said. The tax revenue target was set after due deliberation and it has to be achieved to reduce the uncontrollable budget deficit.

The finance adviser was addressing a seminar on ‘Pakistan’s Economy and Budget 2019/2020’, organised by the Karachi Council on Foreign Relations.

The adviser said the government would slap taxes on goods that are destined for exports, but are sold in local markets. Such manufacturing goods have so far evaded taxes despite being sold in the domestic markets. “They will be subject to taxes,” Shaikh said. “Every taxable income has to be taxed at any cost.”

Shaikh said the country has been facing inconsistent policies over the past 72 years. “These inconsistencies have caused bad economic conditions,” he said.

“Pakistan never had a long-term policy program. In contrast, China has been growing for the past 40 years” on consistent policies.

The finance adviser said another big issue faced by Pakistan is its products have not penetrated into the world markets.

“We have never given due consideration to this important issue.” The adviser said Pakistan is in critical debt trap. Foreign debts stand at $97 billion. The country had to pay Rs2,000 billion, in rupee terms, as interest on loans this year. Another Rs3,000 billion has to be paid as interest during the next fiscal year, he added.

Shaikh said exports have failed to show growth over the last five years. Trade deficit soared to around $40 billion. “We are only importing things for our consumption,” he added. “In these circumstances no one could control rupee value,” he added.

The finance adviser said the government endeavored to address such challenges in the budget. In these critical economic conditions, friends of Pakistan provided financial assistances.

Further the country also entered into a loan program. “IMF program helps Pakistan to

take benefits from other lending agencies,” he added.

Shaikh said people should shun use of imported goods for the improvement of the economy. An amount of Rs100 billion has been allocated for the improvement of businesses.

Federal Board of Revenue Chairman Shabbar Zaidi said there are difficulties in imposing tax on agriculture. Agriculture tax is a provincial jurisdiction as per the constitution.

Zaidi said the government has increased middleman of agriculture products by 10 times. Individuals earning Rs1.2 million would pay Rs2,500 as tax. The budget has been drafted to collect taxes from people who have capacity.

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