Wednesday, March 29, 2023

Tarin claims common man will pay barely Rs2bn in new taxes: Supplementary Finance Bill

The government had presented to review tax immunities of Rs343 billion in the supplementary finance bill, 2021 out of which Rs272 billion taxes were refundable or adjustable, while the remaining Rs71 billion tax exemptions were about luxury items, said Finance and Revenue Minister Shaukat Tarin on Thursday.

“We are not burdening the average man because just Rs2 billion tax exemptions have been suggested on products that can be relevant to the common man,” he said after introducing the supplementary finance bill in parliament.

The IMF had wanted us to impose new taxes of Rs700 billion, but we justified not taxing food and other critical commodities, bringing it down to Rs343 billion.

The minister said the government planned to exclude Rs112 billion in machinery taxes and Rs160 billion in pharma taxes, which would be fully refundable.

He stated before unnecessary taxes were exempted on withdrawn commodities.

The minister was accompanied by the Minister of State for Information and Broadcasting, Farrukh Habib, and the President of the Federal Revenue Council, Dr. Muhammad Ashfaq.

The major goal of the supplementary finance law, according to the finance minister, was not to generate income, as the FBR had already surpassed its revenue target, but to document diverse enterprises and persons.

According to him, approving this law would assist extend the tax net by increasing the number of persons paying income and sales taxes.

Tax breaks on machinery and medicines will be repaid within seven days or offset against other income or sales taxes, he said.

He said the rest Rs71 billion tax exemptions were suggested on luxury imported commodities including high-end bakery, fish, chocolates, etc.

Read Also: Opposition Protested After Govt Represent Mini-Budget

Computers, for example, will be spared from taxation by Rs2 billion, he claimed. Iodized salt, red chilies, and contraception

He stated that during negotiations with the IMF, “We defended not to tax food and other essential items such as wheat flour rice vegetables pulses fresh fruit, milk, sugar cane, educational books, sugar, imported computers, laptops, imported plants for Special Economic Zones tractors agriculture fertilizers pesticides used clothe cinema equipment and others.”

Concerning the IMF’s requirement that the Central Bank be autonomous, Shaukat Tarin stated that it was part of the PTI’s objective to empower institutions.

According to him, there was nothing wrong with providing the State Bank of Pakistan administrative autonomy, but the new SBP bill prohibited the government from borrowing from the central bank.

PTI government has not borrowed a single rupee in the last two and a half years, he added, adding that previous governments’ reckless borrowing led to price increases and currency devaluation.

The minister insisted that the government was simply providing the SBP administrative independence, but the supreme authority would be held by a Board that the government would choose and approve.

Moreover, He stated Board  would recommend a governor and deputy to the government, which would finalize the selections

SBP would also be responsible to parliament and its standing committees.

He underlined that no constitutional alteration was being made because the Bill could be overturned by the same method at any time.

In response to a question, the minister stated the increased levies on imported cars were imposed only to control the balance of payments.

Tarin said the tax exemptions would not affect the average person and would not raise inflation. On the worldwide market, the costs of petroleum products, cooking oil, steel, and coal have risen considerably, he added. He stated that when the international market prices of essential commodities fall, so will the inflation rate in Pakistan.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments
Latest news
Would love your thoughts, please comment.x