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Plan afoot to do away with tax exemptions by Dec 31: Dar

Plan afoot to do away with tax exemptions by Dec 31: Dar

ISLAMABAD: Federal Minister for Finance and Revenue Ishaq Dar said that the government was working on a plan for doing away with tax exemptions and it would be finalized by December 31, 2013.

“Yes, we are working on the plan to do away with tax exemptions,” the minister said while briefing reporters.

He said that tax exemptions would be identified by putting in place a comprehensive plan and exact timeframe for abolishing these exemptions would be envisaged in this upcoming plan.

Under the IMF conditions to secure $6.67 billion loan, Pakistan has agreed to present a plan till December 31 and identified exemptions would be abolished in phases.

The minister said that tax incentive package announced by Prime Minister Nawaz Sharif could not be termed as amnesty scheme. He said that he had opposed amnesty scheme during the PPP regime that was envisaged to give clean chit to evaders by giving just Rs 40,000. Now under the existing scheme, those who would avail the investment scheme would have to invest for promoting industrialization in the country.

Sharing details of investment scheme, the minister said that those units could avail this scheme which would start commercial production during the period starting from January 1, 2014 to June 30, 2016. “It is sufficient time for starting commercial operation as this scheme cannot allow this facility for indefinite period,” he added.

The minister said that the Prime Minister also announced incentive for dormant National Tax Number (NTN) holders as they would be exempted from paying any default surcharge. Now the date for availing this scheme has been extended from December 15, 2013 to February 28, 2014, added the minister.

In case of non-filers, the minister said that the date for availing this scheme was again extended up to Feb 28, 2014.

He said that FBR collected Rs 792 billion in first five months (July-Nov) period of the current fiscal against a collection of Rs 679 billion in the same period of the last financial year, registering a growth by 17 percent. The government, he said, was taking measures to set the right direction for the economy.

He said that FBR performance was dismal in last fiscal year as its collection went far below than the envisaged target. FBR collected just Rs 1936 billion in last fiscal year against the set target of Rs 2381 billion.

He said that the tax target was revised downward from Rs 2381 billion to Rs 2050 billion and at this point the caretaker government had made commitments with international donors to take additional measures of Rs 200 billion. “I can show you summaries to this effect which were blocked by the then President,” he added.

He said that the PML (N) government would exactly fulfill their commitments by taking additional tax measures to collect Rs 2475 billion in the current budget.

He said that establishing of consensus, the caretaker government which came into being as result of 18th Constitutional Amendment, had failed to fulfill their constitutional obligation. “Now our government will propose amendments binding the future caretaker government to give clean balance sheet to the upcoming government,” he added.