MECHANISM DEVELOPED TO CURB TAX THEFT: CLAIMS THE FINANCE MINISTER
Nov 19 - 25, 2012
Federal Minister for Finance, Dr. Abdul Hafeez Shaikhhas claimed that the government has devised a comprehensive mechanism to curb tax theft by identifying potential tax evaders and bring them into tax net to improve revenue collection. While talking to newsmen after inaugurating the 18th Annual General Meeting and Conference of Pakistan Society for Development Economists (PSDE) in Islamabad last week, he claimed that that the revenue collection target of Rs 2381 billion for the on-going financial year (2012-13) would be certainly achieved." The government has established a databank that would help it to identify with evidence , the tax evaders on the basis of their consumption of resources and lifestyle, ì he added.
Continuing the Finance Minister said that credible way of implementation would be insured and now the government would not just suffice on issuing the notices but would go for proper implementation of well conceived mechanism. He said that it would also seek support within the society by sensitizing the people to take this issue as a national issue.
The 3 day conference entitled "Economic Reforms for Productivity, Innovation and Growth "has been organized by PSDE in collaboration with Pakistan Institute of Economic development to discuss the economic problem faced by Pakistan and suggest remedial measures.
In his inaugural speech at the PSDE Conference defended the economic policies of his government and claimed that as result of these policies the economy was showing continuous signs of recovery However, while talking to the newsmen he was more candid and in moment of truth conceded that a week governance structure , excessive role of the government; enhanced cost of governance, increased unproductive expenditure of the government and its inability to control losses of the public sector enterprises were the major problems facing the economy of the country. He said that the government is trying to ensure the support of the coalition partners in the parliament before moving the Tax Amnesty Bill.
The government, he said, identified consumption pattern of potential tax evaders as owners of four vehicles and frequent travelers abroad would not remain out of tax net.
"Effective enforcement will be the key for the upcoming tax Amnesty Scheme as efforts made in the past failed to yield the desired results . After completion of required spade work , the purpose scheme is expected to be tabled before the upcoming federal cabinet meeting", In principle, he said, the amnesty scheme was approved by him, which would now be tabled before the federal cabinet. The government is banking on the database of potential non filers as data of evaders gave right kind of information that would be used to mobilize the revenues.
Earlier, during the conference, the minister said that the onus of collecting revenues was solely put on the federal government and people forgot that there were five governments in the country, one federal government and four potential governments. The revenue collection of the federal government jumped up by Rs350 billion or 22% in the last year that resulted into increasing tax to GDP ratio by 0.5 % of GDP while in some provinces it remained negative, he added.
The federal government, he said, transferred Rs5000 billion to provinces in the last five year and in the aftermath of 7th NFC Award the government transferred additional Rs1000 billion to federating units in last two financial years. He said that the government could not pass Reformed General Sales Tax from the parliament because of political arithmetic but the government abolished sales tax exemptions except for health and education and broadened the tax base.
Finance minister claimed that Pakistan's economy continues to show signs of recovery with improvement in key macroeconomic indicators . Despite major external and internal shocks , the economy has shown resilience and is projected to grow by 4.3 percent in FY13 FY13 after a healthy growth of 3.7% in FY12. Exports continue to show a healthy growth.; remittances remain strong keeping foreign exchange reserves stable and most importantly the inflation has been contained. The goal is to build on these positive trends and insulate the economy against any potential external shocks
He claimed that that the government has successfully doubled the tax collection from Rs one trillion to Rs 2 trillion during the last four years. Similarly the remittances has doubled - from US dollar 6.4 billion in 2007-8 to 13 billion US$ in 2011-12., he said expressing hope that that the export target of US$ 26 billion for the on-going fiscal year will be achieved.