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Finance czar Tarin to table ‘mini-budget’ in Senate today

Opposition’s protest expected over the new legislation
According to the Senate Secretariat press release issued on Monday, “President Arif Alvi has summoned the Senate session under Article 54 (1) of the Constitution. The session will be held on January 4, at 1600 hours.” File
According to the Senate Secretariat press release issued on Monday, “President Arif Alvi has summoned the Senate session under Article 54 (1) of the Constitution. The session will be held on January 4, at 1600 hours.” File

Finance Minister Shaukat Tarin will table the finance supplementary bill, commonly known as mini-budget, today (Tuesday) in the Senate to pave way for the International Monetary Fund loan as President Arif Alvi had summoned the upper house session for laying the legislation, Aaj News reported

According to the Senate Secretariat press release issued on Monday, “President Arif Alvi has summoned the Senate session under Article 54 (1) of the Constitution. The session will be held on January 4, at 1600 hours.” Sources said that the opposition would protest against the tabling of finance bills in the upper house of parliament.

The federal government on Thursday presented the finance supplementary bills in the National Assembly amid the opposition’s outcry. The two bills, for long seen as thaws in the revival of the IMF programme, have invited severe criticism from the opposition.

The government is seeking the green light from the IMF in reviving the stalled $6 billion worth of Extended Fund Facility. The IMF board is due to meet on January 12, and many see the NA session as a key element ahead of the meeting.

Talking to reporters after launching the tax directory of Parliamentarians for the tax year 2019 at the Federal Board of Revenue, Tarin on Monday said that delay of two to four days in the approval of the Finance Supplementary Bill, 2021 would not be an issue as the IMF can extend board meeting couple of days beyond January 12, 2022.

He stated that if the approval of the finance bill was delayed for two or four days, there would be no issue.

A date of January 12 has been fixed with the IMF and it should not be any problem for the Fund to extend it for two or four days, the finance minister added. He further stated that the supplementary finance bill would be introduced in the Senate today (Tuesday) and is expected to be cleared from the Senate in four days. Subsequently, the bill will then be passed by the National Assembly.

Earlier, addressing at the tax directory launch, the finance minister said that the government would start sending tax notices to 15 million people from the ongoing month (January) on the basis of assessment determined through their consumption pattern, travel and utility bills, etc.

He said that 15 million people’s data was available with the FBR and the National Database Registration Authority and through artificial intelligence, their income would be assessed on the basis of their bank accounts, travel history, utility bills, etc.

“We will start sending them notices and place the record before them of their consumption pattern and in case of any objection they would have the option of a third-party audit.”

Tarin regretted that out of three million return filers, only two million are paying taxes and his target was to increase the tax-to-GDP ratio to 20 million in the next five to six years to put the country on six to seven per cent GDP growth.

Presently, the tax-to-GDP ratio was between 10-12 per cent. The government policy is that everybody should pay his/ her share of taxes as there were no sacred cows, he said.

Tarin said that the tax rate would be reduced with the increase in revenue. He regretted that the country was facing serious financial problems due to low tax collection and having to borrow for development expenditure. He said that everyone was evading taxes as per his capacity.

The finance minister said that there was distortion in taxes as some taxes were being collected at the federal level and some at the provincial level, which necessitate the need for harmonisation in taxes so that the federal and provincial departments should not harass the people.

“The government is collecting withholding taxes because we do not have the option to collect taxes from other sources. There is no justification of “turnover tax” because if a company is in losses how it can pay turnover tax,” he said.

Tax should be paid on the basis of income generated by a company and loss-making companies should not pay turnover tax, he said, adding: “We are sometimes unfair with the taxpayers.”

He said: “We have to go for simplification of tax and there should be only two taxes, sales tax and consumption tax, and remaining have to be removed gradually. He said that there is no point in turning over tax and have to go to progressive taxation and if there is the income it should be taxed. There should be, at least, 20 million taxpayers in the country on the basis of the country’s population.”

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