ISLAMABAD: Minister for Finance Senator Ishaq Dar said on Thursday that the imposition of GST on petroleum products and regulatory duty on various items had been a practice of previous governments also and was in accordance with law and constitution.
"The imposition of GST and regulatory duty is not a new thing. It has been happening consistently in Pakistan," he told the National Assembly.
The minister said that the government had imposed GST on petroleum products and regulatory duty luxury items to minimize shortfall on the projected revenue target for the current fiscal year. He said that a government always imposed duty on different items or products due to some valid reasons.
He said Sales Tax Act 1990, the Customs Act 1969 and Income Tax Ordinance empowered the government to impose duty and new taxes adding that the recently imposed taxes were in accordance with these Acts and Ordinance.
He said several countries including India, took such measures to arrest the impact of declining oil prices on revenue collection. He said due to decline in petroleum prices the revenue of government had also started decreasing.
He said that during the ongoing year the government had to face an expected shortfall of Rs 165 billion adding that measures taken so far would only help get Rs 46 billion.
Ishaq Dar said that the imposition of Regulatory Duty (RD) on furnace oil would help the government collect Rs 5 billion revenues during the remaining period (February-June) of the current fiscal year, while GST on cosmetics, beverages and electronic products would help collect just one billion rupees.
He said that sales tax was initially enhanced from 17% to 22% and then from 22% to 27%, which would help the government to collect Rs 24 billion. He said that in total, by raising GST, on petroleum products, enhancing Withholding Tax (WHT) rates for non-filers, raising RD for luxury items, increasing RD for furnace oil and metal scrap, the government would fetch Rs 46 billion during the remaining period of the current fiscal year.
The minister said that Rs 31 billion negative impact on revenue collection out of the total Rs 165 shortfall was because CNG and fertilizer companies went in the court against the government's decision to impose taxes. "We have not thought of adjustment of these cases. We will fight and win these cases", he said.
He said that National Tax Number (NTN) would not be mandatory for the taxpayers from the next fiscal year as they would be able to file tax returns using Computerized National Identity Card (CNIC) numbers from July 1. However, he said companies and other entities would need NTNs.
Dar also clarified that in case the prices of petroleum products are increased in the future, the government would decrease the tax accordingly. He pointed out that the PPP government had also been issuing SROs but he never objected that. He said that the government was also paying back IMF loan adding that at present country's foreign reserves stood at $16 billion.
He said unfortunately in the past focus had not never been made to explore country's natural resources and the entire attention had only been on imports.
Comments
Comments are closed.