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Govt bringing law on declaration of foreign assets


Aug 27, 2015
ISLAMABAD - The government is working to formulate a new law in the country to bring transparency in the declaration of foreign assets after the Panamagate scandal.

“We have started exercises from April 21, and with consultation of the State Bank, the FBR and Securities and Exchange Commission of Pakistan we are in process to devise a law to bring transparency in the disclosure of Pakistani assets parked abroad,” Finance Minister Ishaq Dar told a post-budget press conference along with his economic team.

He informed that Federal Board of Revenue (FBR) would hold important meeting with Swiss authorities in Bonn on June 23-24 to get access to the Pakistani assets worth of $200 billion in Swiss banks.

Dar also said government is conducting a study to give an opportunity to Pakistanis to pay one-time tax for declaring offshore companies and secret bank accounts in other countries as did by India.

Pakistan is expected to get membership of Organization for Economic Cooperation and Development (OECD’s) global forum that would ensure exchange of information regarding tax evasion, he added.

On a question about loans, Dar said the government has taken loans worth of $15.5 billion during three years and it repaid $10 billion against the previous loans taken by previous governments. Net impact of the new loans is only $5.5 billion, he added.

The minister said new budget would help in increasing GDP growth, generating job opportunities, alleviating poverty and improving lot of the common man. He hoped that measures announced in the budget would give boost to agriculture to help it contribute its share to the GDP.

The economic wizard of the PML-N government defended the taxation measures of Rs148 billion by saying they have targeted non-taxpayers in the budget. He pointed out that every effort has been made in the budget not to put additional burden of taxes on filers.

The finance minister however acknowledged that taxes on some of the items would affect people.

He informed the government has decided not to impose taxes on poultry sector after getting assurance they would keep live chickens’ price at Rs145 per kg and chicken meat price at below Rs200 per kg during entire year.

About increase in tax on mobile phone sets, he said costlier phones were mis-declared as low category phones and taxes have been enhanced to compensate for this leakage.

He said that government has completed the three-year process of eliminating tax exemptions through SROs, as FBR withdraw exemptions worth of Rs80-90 billion in the budget. This would have a cumulative impact of 400 billion rupees.

The minister said the government could not withdraw the income tax exemptions given to the president, the prime minister, all federal cabinet members, provincial governors and all services chiefs and corps commanders due to the their low salaries.

“If we withdraw their income tax exemptions, we must have given them increase in their salaries which are very low”.

He said government has increased the pays and pensions by 10 percent against the recommendations of the enhancing it in accordance with inflation rate, which is below three percent. Federal government employees would get 10 percent adhoc relief after merger of two previous adhoc reliefs and as a result, they would get about 13 to 13.5 percent increase in their salaries, he added.

He said the government would be bearing expenditure of 57 billion rupees on account of increase in salaries and pension. Of this, an expenditure of 12 billion rupee would be spent on welfare of low-grade employees including upgradation of their scales and increase in allowances meant for them.

He said that under Medium Term Goals 2016-19 GDP growth would gradually enhance to 7 percent, budget deficit reduce to 3.5 percent of the GDP, tax to GDP will increase to 13.9 percent; foreign exchange reserves to reach $30 billion and inflation will be contained to single digit by the year 2018-19.

The finance minister pointed out that agriculture posted negative growth this year and with this in view incentives were announced by the prime minister a few months back, which would continue next year.

“The government has given priority to the agriculture sector and exports, as the country is now moving towards growth from stability,” he maintained. He vowed to take investment to GDP to 21 percent by 2018 to achieve the economic growth of 7 percent that creating employment.

Sharing the details of Agri package, he informed that government has reduced the urea price by Rs400 per bag and DAP’s price by Rs300 per bag in the budget. It has also slashed the power tariff for agricultural tube wells by Rs3.5 to Rs5.35 per unit. The seven percent General Sales Tax (GST) on pesticides has been withdrawn. The agriculture sector would show 4-5 percent growth in the fiscal year to come, he expressed the hope.

He said exports were the second area of the concern for the government that declined by 11 percent this year. The government planned to take exports to $45 billion. It has announced zero-rated tax facility for the five exports sectors (textile, leather, sports goods, surgical goods and carpets). Pending sales tax refunds till April 30, whose RPOs have been approved, will be paid by August 31, 2016, Ishaq Dar announced.

“Defence allocations have been increased by 11 percent despite constraints,” he said and added that operation Zarb-e-Azb is moving towards its final round and its successful conclusion would help attract foreign direct investment. He said the country suffered huge losses of 118 billion dollars during war on terror. “A then government made the poor bargaining on war on terror as they should take commitment from the World to recover the losses occurred due to the war,” he said in an aggressive tone.

He said increase in non-development expenditure has been contained to seven percent.

He said the government would face additional burden of Rs8.5 billion by not increasing oil prices for the ongoing month of June. The government has brought down the GST at below 17 percent on four petroleum products except High Speed Diesel that has 34 percent GST.

To a question, he said the government is according priority to the construction of Western Route of China-Pakistan Economic Corridor as per understanding with political leadership. He said Lahore-Karachi Motorway was missing link in Prime Minister’s vision of Motorways for the country.

Published in The Nation newspaper on 05-Jun-2016
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