Islamabad:
The Government is considering a mini budget to raise funds for flood rehabilitation by imposing additional taxes on cars, cigarettes, electronic goods and an imported articles equal to the reduction of regulatory tariffs carried out in June.
The sources said the plan is aimed at luxury items used by rich individuals, as well as more than 1,100 imported goods, with income that will be collected through a federal tax.
If Prime Minister Shehbaz Sharif approves it, the mini budget would help close the income deficit and generate funds for flood rehabilitation, although the provinces carry out most of the provinces making most of the provinces.
Government sources told Express PAkGazette that the Minister of Finance, Muhammad Aurengzeb, presided on Tuesday a meeting to consider proposals that the Government could introduce through a bill of flood impulse.
The amount of additional income through the mini budget, the rates and exact goods that will be affected remain undecided, the sources said. The plan, according to some sources, is to raise at least RS50 billion through the mini budget, but the final amount could be higher.
The development occurred immediately after the tax deficit of RS40 billion during the period from July to August, which is expected to be extended well above RS100 billion at the end of this month, AMIF devastating floods. This will undermine some of the fiscal objectives related to the International Monetary Fund (IMF).
The spokesmen of the Ministry of Finance and the Federal Income Board (FBR) did not respond to requests for comments on government plans to impose flood tax.
The sources said the government was considering a 5% tax on electronic goods beyond a certain price threshold. The threshold is ending at this time, said a source. Similarly, there is also a recommendation to impose RS50 rupees in each package of cigarettes, regardless of the brand and price, the sources said.
The cigarettes are consumed by rich and poor equally, and any tax can crowd the possible narrative of the government to collect money from the rich to spend in the population affected by floods.
Unlike the case of tax that is shared with the provinces, a tax is federal income and does not become part of the FBR collection. But the FBR income deficit will be compensated due to the increase in income measures that are not tax, such as impulse.
During the meeting on Tuesday, the question of the constitutionality of the federal tax on certain goods was also discussed in detail, the sources said.
The FBR has been struggling to meet its objectives despite the large -scale manufacture that grows 9% in July, compared to a year ago, according to the Pakistan Statistics Office (PBS).
There have also been criticism of the Government for its inability to rationalize spending and its inclination to impose more taxes. The IMF has also recently questioned a new proposal to impose a new municipal tax to build RS213 billion worth Jinnah Medical Complex in Islamabad.
The sources said there was another proposal under consideration to impose a tax on the records beyond some engine capacity. The government can reach 1,800cc and above engine capacity cars. The cars are already very taxed and the government obtains from 30% to 61% of the total price in taxes.
Ali Asghar Jamali, Executive Director (CEO) of the Indo engines, said the prices of the vehicles were high due to government taxes, which vary from 30% to 61% of the total price of the vehicle. Jamali said the fiscal component in the case of a small car is 30%, including RS32,935 of the recently introduced gravamen into combustion engines.
In the budget, the Government had reduced regulatory duties in approximately 1,150 articles as part of the Commercial Liberalization Plan guided by the IMF. Now the Ministry of Finance was considering a tax on these goods equal to reduced rates.
According to the IMF agreement, the Government cannot reverse trade liberalization and may have difficulty selling the proposal to the IMF during the next review conversations. Until now, there has been no real evaluation of damages caused by floods and the Government appealed on Tuesday to avoid speculation.
In Islamabad, a meeting of the Prime Minister on Flood Damage under the presidency of the Federal Minister for Planning of Ahsan Iqbal was held. The meeting reviewed the 1825 flood damage assessment in detail, according to a press release.
During the meeting, the provincial governments agreed that a final evaluation of flood damage would only be possible once the water went back, he added.
Iqbal said that the damage evaluation would be prepared in coordination with the provincial governments. He also declared that a preliminary evaluation of flood damage will be completed within 10 days.
Iqbal urged the media to refrain from speculation regarding flood damage, adding that the precise and transparent data would soon be available. He said that the rehabilitation work is underway in the areas affected by floods, while federal and provincial institutions are carrying out help operations together.
The minister said that an integral evaluation of needs after the disaster of damage and requirements would be carried out with the participation of international organizations. He said that all relief measures in the affected areas would be based on precise and transparent data.
