Frequent IMF programmes complexes policy making: official

KARACHI: The frequent International Monetary Fund (IMF) programmes complexes the policy making for the country, an official said on Monday.

Federal Board of Revenue Chairman Muhammad Ashfaq, while addressing the members of the Karachi Chamber of Commerce and Industry (KCCI) said that Pakistan has entered into the IMF programmes several times resulting in complex policy making.

He said that the revenue collection is 10 per cent of the GDP, while the expenditure is 20 per cent of the GDP. “We take about 8 per cent of the GDP,” he added.

“The second biggest problem is the current account deficit. “We are dependent on imported things. We are spending huge foreign exchange on the import of petroleum products,” he said, adding that palm oil is also being imported in a large quantity.

The FBR would surpass the current year’s revenue collection target, he said, attributing the over the target collection to the business community.

The FBR chairman said that the board had received representations on the CNIC. “The condition of CNIC details is on above Rs100,000 payment,” he added.

He said that he would suggest abolishing further tax, adding that rationalising the tax on imports would help in easing inflationary pressure.

The FBR chairman said that the withholding tax should be imposed on the income rather than transactions.

KCCI President Muhammad Idrees said that Karachi is the financial and commercial hub of Pakistan. The city has collected over Rs1 trillion so far during the current fiscal year. “Traders of this city need special attention,” he said, adding that the FBR is sending notices to the already compliant taxpayers.

Despite the FBR’s efforts to broaden the tax net, it remained narrow, he said, while recommending a fixed tax regime to broaden the tax net. “This regime will increase the tax revenue.”

Regarding the integration of retailers with the FBR, he said that the FBR should evolve a framework to bring retailers into the sales tax net.

Idrees, while referring to the incentives granted to the pharmaceutical industry, called for across the board incentives to all sectors.

Businessmen Group (BMG) Chairman Zubair Motiwala congratulated the FBR chairman for achieving the tax collection targets during the current fiscal year.

He said that around 3 million people in Pakistan are in the tax net, adding that broadening the tax base is the only solution to increase the tax revenue.

Motiwala said that the retailers face trouble due to the difficulties in the integration of point of sale (POS) with the FBR system.

He stressed that the FBR should formulate easy conditions to attract the retailers to share their sales and purchase on a real-time basis.

The BMG chairman said that the FBR has crossed Rs286 billion in tax collection against the target, while questioning the refund disbursal in additional revenue collection.

Due to these reasons the FBR is also contributing to inflation, he lamented, the rupee is depreciating on a daily basis due to the disturbed political and economic conditions, he added.

The BMG chairman demanded freezing the dollar at Rs150.