Islamabad:
The Minister of Finance, Muhammad Aurengzeb, reaffirmed on Wednesday Pakistan’s commitment to increase tax collection at 11% of GDP for the end of the fiscal year, despite the fact that the Federal Income Board (FBR) lost its quarterly goal for RS198 billion.
Aurengzeb told journalists after a meeting of the parliamentary committee that negotiations with the IMF progressed in the “correct direction.”
Separately, Pakistan informed the IMF that his requirement to make public the statements of assets of senior public officials, including beneficial property assets and those who have family members, would apply only to public officials, not to the Judiciary or other state institutions.
“We are very clear that we are still committed to achieving FBR GDP relationship of 11% for the end of this fiscal year,” said the minister in response to the questions about the deficit.
I was talking to journalists after the Senate Permanent Committee meeting on finance. Senator Salem Mandviwalla of the PPP presided over the meeting.
For the current fiscal year, the IMF has established Pakistan as a goal of increasing the relationship imposed on GDP of the FBR by 0.7 percentage points to 11%. This translates into an annual collection objective of RS14.13 billion, which require extraordinary application measures and significant efforts to expand the tax base. The FBR will need to go beyond the advantages such as cars and multiple salary increases for officers, and instead will focus on expanding the base of taxpayers to meet the objective.
In the previous fiscal year, the FBR had lost the reference points of the IMF in both counts: the ratio imposed on GDP fell below the 10.5%objective, while absolute collection also did not reach almost RS13 billion.
Against the objective from July to September of RS3.083 billion, the FBR collected RS2.885 billion. He suffered a deficit of RS198 billion in a period of only three months despite launching multiple initiatives, including a very financed FBR transformation plan.
The minister said that some of the income were tied in litigation, hoping that decisions about them can unite the revenue deficit sustained in the first quarter. But he clarified that it depends on the courts how they decide the cases.
The FBR said that the tax revenues worth RS177 billion were caught in the Supreme Court of Pakistan and that it has now transmitted to the IMF that the Apex court is expected to announce a decision this month. However, guarantees similar to the IMF had also been given in the last fiscal year.
The cases in dispute involve challenges by taxpayers against the retrospective application of the Super Tax and the government’s decision to impose additional levies to 10 sectors of the economy.
While answering a question if IMF conversations would conclude on time, the finance minister said “so far, so good.” He added that IMF conversations were covering both quantitative performance criteria and structural reference points.
“Regardless of the discussions that are happening, they are moving in the right direction,” added the Minister of Finance.
Assets statements
The sources said that earlier this week, the Cabinet division also gave an informative session to the IMF about the state of implementation of a condition to amend the law of public officials to ensure that the statements of assets of high -level public officials, including their assets owned by their and a member of their family, are digitally and publicly accessible through the FBR.
It was told to the IMF that, according to the Public Officials Law, only federal government employees are covered, while the Judiciary and military officers do not fall into the scope of the law.
The IMF asked about the mechanism of responsibility of public officials who have discrepancies in their asset statements. It was said that the FBR can only evaluate these statements in view of any evasion of the Income Tax and cannot analyze the assets with the lenses of any corrupt practice, the sources said.
The discussions took place if a new body must be formed to comprehensively analyze asset statements and not limit them to tax evasion, the sources added.
However, the IMF condition remains largely ineffective, since even most public officials do not fall into their reach.
The law establishes that the “civil official means a person who is a member of a service of all Pakistan or a civil service of the Federation or that he has a civil position in relation to the affairs of the Federation, including any position related to the defense.
But it does not include a person who is in the Diputación to the Federation of any province or other authority and a person who works in contract, or with a workload or paying for contingencies.
Due to a very limited definition of a “civil servant”, it is estimated that only 20,000 to 25,000 civil officials can be revealed. The officers of the autonomous bodies, the regulatory bodies such as the State Bank of Pakistan, the National Electric Power Regulatory Authority, the Petroleum and Gas Regulatory Authority and the Telecommunications Authority of Pakistan and the Provincial Civil Services will still remain exempt from digitally filling the yields and its subsequent public disc.
Under the condition of the IMF, it was proposed to introduce a new clause 15-A statement of assets in the old law to enable the declaration of the assets of public officials. The Government has also relaxed the right to access the 2017 Information Law to allow the public dissemination of this information.
The new clause establishes that “despite anything contained in clause G of Section 7 of the Law on the Law of Access to Information of 2017, the declaration of assets of a BS-17 and Superior official, its spouse and the dependent children, including foreign assets and responsibilities, as can be prescribed by the Federal Board of the Board of Reception and the same available, through FBR, in accordance with the rules. With the rules, according to the rules.
