Bill to be presented for abolishing tax exemptions

Bill to be presented for abolishing tax exemptions

ISLAMABAD: The government will present a bill before the parliament to abolish tax exemptions that are discriminate towards many individuals and sectors of the economy.

Minister for Finance and Revenue Dr. Abdul Hafeez Shaikh said this at a press conference on Tuesday.

He said many companies and sectors are exempted from the taxes and to abolish such discrimination and to bring uniform system all such exemptions would be brought under the law.

He said under Prime Minister Imran Khan’ vision to collect taxes in a way that poor people should not be affected, tax system is being reformed.

He said that the cabinet approved draft of State Bank of Pakistan (SBP) Amendment Bill 2021 to give absolute autonomy to the Central Bank.

He said the central bank’s core objective was to control inflation and to fight increase in prices and the law also aimed at providing the Bank further autonomy to ensure that it fulfills its objectives of price stability with complete independence.

He said the law would also help SBP to independently fulfill the requirements of monetary policy and exchange rates without intervention of the the government. The term of Governor SBP, he said would also be extended to five years.

Hafeez Shaikh said the government would stop borrowing from the central bank so that the federal government could manage financing by its own resources or by lending from the commercial banks.

Further he said the monetary and fiscal coordination board would also be abolished and instead the government would arrange coordination through special committees.

The minister informed that the Governor would be appointed by the President of Pakistan and the Bank would only be accountable to the Parliament.

He informed that the second law approved by the cabinet was about Pakistan’s State Owned Entities (SOEs) that were engaged in business activities.

The purpose of this law is to provide more authority to the SOEs by stopping intervention of the ministries and the ministers.

The board and the Chairman would be appointed by the government under a transparent and professional way and the CEOs of the institutions would appoint the boards, instead of the minsters so that professionalism in these areas should be promoted.

Further he said the CEOs would be made more secure so they run their companies without any pressure to compete with the private sector.

He pointed out that these bills would be followed on fast track basis.

About International Monetgary Fund, Shaikh said Pakistan and the IMF were currently engaged to resume the Extended Fund Facility that was paused for few months due to COVID-19.

“The IMF international Board would meet soon and financial lending for Pakistan will resume”, he added.

Adviser to Prime Minister on Institutional Reforms Dr. Ishrat Hussain on the occasion said major reforms in the institutions were being introduced to promote transparency and professionalism in the government departments.

He said the due to these reforms, losses in government institutions were drastically reduced and efforts were made to wipe out all losses in future.

To a question, Shaikh said privatization was a difficult task and big investors were needed in this process.

He said the privatization programme was being extended and the process was now resumed after a temporary halt due to COVID-19.

To another question, he said the government was minimizing gap between the income and the expenditure and the primary fiscal balance was in surplus of Rs 400 billion.

Besides, he said the government had also not borrowed a single rupee from the Central Bank nor it provided additional grants to the government departments.

About inflation, he said the government had not control over the prices of such basic kitchen items which are imported from abroad.

However, the government in this regard can only do to provide assistance to the extreme people and it is providing financial support to over 15 million, he added.

Further he said at utility stores too, the government was providing the basic usable items at affordable prices to the targeted income group. He informed that the targeted subsidy would be further extended in future.

Minister for Industries Hammad Azhar said that utility stores was providing wheat flour at a subsidized rate of Rs 800 per 20 kg bag, sugar at Rs 68 per kg, ghee at Rs 125 per kg and the price was retained for over a year an it has been decided that this price would continue in future as well.

Chairman Federal Board of Revenue Javed Ghani and Secretary Finance Kamran Afzal were also present on the occasion.

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