Real estate, bourses, services, agriculture sectors to be taxed gradually: five percent job quota in public sector for minorities approved by Cabinet

The Federal Cabinet on Wednesday approved five percent job quota for the minorities and decided to bring new sectors in the tax net in budget 2009-10. Giving details of the Cabinet meeting chaired by Prime Minister Syed Yousuf Raza Gilani, Information Minister Qamar Zaman Kaira said that real estate, agriculture, stock exchanges and businesses have to be brought under tax net step-by-step or gradually.
Two of them would be taxed in the next fiscal year to broaden the tax base, as the country could not depend on foreign aid. The minister said the meeting also took notice of certain incidents of dumping by few countries and decided to counter it.
However, he did not disclose the names of those countries. Kaira said that Advisor to the Prime Minister gave a detailed briefing to the Cabinet on prevailing economic situation and said that the economic stabilisation programme has helped improve the economic indicators.
The current account and fiscal deficits have been brought down to 5.3 and 4.2 percent from 8.4 percent and 7.4 percent respectively. Inflation and trade deficit have also come down and efforts are afoot to bring inflation down to single digit by the end of current fiscal year.
Foreign exchange reserves have improved from $3.4 billion to over $7 billion and would be $12 billion by the end of current fiscal year. This all was possible because of difficult decisions such as withdrawal of subsidies taken by the government. The borrowing from the State Bank of Pakistan was also curtailed but the real concern for the government is slow GDP growth.
The minister said that tax-to-GDP ratio would be increased by bringing in more sectors into the tax net that would enable the government to invest in other sectors of the economy. This along with the materialisation of the US and the Friends of Pakistan (FoP) pledges would help boost industrial sector and ultimately the GDP growth.
The minister hoped that the EU and other friendly countries would give market access to Pakistani goods. This would also help improve balance of trade, he added. He hoped that the interest rate would also be reduced and the support price of cotton would be announced soon.
Kaira said that the Cabinet identified a job-oriented growth, sustainable productivity of agriculture and industry along with meeting the energy requirements as major mid-term challenges to the economy.
The meeting also decided to add an additional feature to the Rs 500 note to make it more secure against any forgery and granted extension of Uch gas field lease to Oil and Gas Development Company (OGDCL). The minister said that the donors' conference being held today (Thursday) would pledge financial support for the Internally Displaced Persons (IDPs).