News
Friday, September 24, 2010
No financial emergency needed, says Hafeez Shaikh* Says revisions in fed, provincial budgets underway with arrangements to introduce reformed GST from Oct 1
* Elite resisting paying taxes, lobbies have obtained exemptions from tax
Staff Report
ISLAMABAD: Finance Minister Dr Abdul Hafeez Shaikh on Thursday ruled out any possibility of a financial emergency in the country to overcome financial constraints and forewarned that powerful lobbies in the country will strongly resist imposition of the general sales tax (GST) to be enforced from October 1 this year.
Talking to reporters after a workshop arranged by Transparency International Pakistan, the minister dispelled the impression of a “mini budget” and said that at a time when a large area of the country and over 20 million people had been badly affected by the devastating floods, some changes were required in the budget but that did not call for the presentation of a “mini budget”.
He explained that revisions in the federal and provincial budgets were already underway along with arrangements to introduce the reformed GST from October 1. The revised budget would also be placed before the parliamentary committee on finance to obtain its approval on the proposed measures, he added.
Sales tax: Shaikh said the elite and powerful were resisting paying taxes, while powerful lobbies had obtained exemptions from the sales tax, which had destroyed the true spirit of the sales tax law. He said that currently, Pakistan’s tax-to-GDP ratio – nine percent – was the lowest in the world and it needed an upward revision to meet the challenges of reconstruction of flood-affected areas as well as rehabilitation of the flood affectees. This would need mobilisation of massive resources and the government would take measures for resource mobilisation, the minister added.
He said, “We don’t want to take more loans and intend to generate resources from those who are avoiding paying taxes on their taxable income and business activity in the country.”
Terming the imposition of Capital Gains Tax on stock market a bold step of the government, the minister said that a reformed GST would also be enforced and other measures taken to mobilise more resources. He, however, said that special care would be taken while adopting new taxation measures to save lower income groups from suffering.
He said Pakistan would present a comprehensive flood reconstruction plan and vision before the donor community in a meeting of the Pakistan Development Forum scheduled in November, the implementation of which would start by January 2011.
Shaikh said the government would ensure complete transparency in utilisation of aid received from the donor community and use all possible measures to set an example of transparency so the world knows how efficient and transparent the country is.
Donors: He hoped the world community responded in an extra-ordinary manner to this extra-ordinary disaster, adding that the flood-affected population would be provided help in three phases of early recovery, rehabilitation and reconstruction.
Shaikh said to ensure transparency, the government had formed the National Oversight Disaster Management Council and all provinces had been given representation in it. The council had been entrusted with a mandate in four major areas of monitoring aid inflows, releasing of aid, reviewing all plans and targeting genuine affectees.
He mentioned that the government had formed a website to disseminate information regarding foreign aid inflows and contributions received in special funds created by the prime minister, chief ministers and other major organisations. He appreciated the European Union for increasing market access for Pakistani goods with duty concessions to help Pakistan in the wake of the devastating floods.
Courtesy www.dailytimes.com.pk