Pakistan obtained $2,438.32 million foreign loans from the International Monetary Fund and other international financial institutions during the present government tenure, June 2013 to February 2014, and paid $186.94 million interest on the amount.
The annual amount of interest to be paid to IMF and international financial institutions is $10 million and $143.78 million from March 2013 to June 2014; $22.81 million and $299.69 million in 2014-15; $13.69 million and $270.52 million in 2015-16; $13.25 million and $249.41 million in 2016-17 and $13.19 million and $228.55 million in 2017-18, respectively.
In written reply to a question, Minister for Finance, Revenue and Economic Affairs Ishaq Dar informed the National Assembly on Friday during the question hour that total domestic loans obtained for budgetary support from June 2013 to February 2014 come out to be Rs 1287.7 billion. "It includes loan obtained from State Bank of Pakistan, scheduled banks and non-banking sector. Interest paid on domestic loans during this period amounted to Rs 781.0 billion."
The minister also informed the House through a written reply to a question that taxpayers are exempted from the audit proceedings if the tax paid for tax year 2013 is at least 25 percent more than tax year 2012. Source of investment is not to be probed for investment in green field industrial projects, expansion projects, construction industry in corporate sector, low cost housing construction in corporate sector, livestock projects in corporate sector, new captive power plants and mining and quarrying in Thar Coal, Khyber Pakhtunkhwa and Balochistan.
An NTN holder who has not filed return of the tax year from 2008 to 2012 shall be exempted from audit, additional tax and penalty if he files returns by 30-4-2014 and pay Rs 20,000 tax for each of the missing returns. A non-NTN holder shall also be exempted from audit, additional tax and penalty if he files return by 30-4-2014 and pay Rs 25,000 tax for each return.
So far notices requiring filing of return have been issued to 77,375 potential taxpayers during current financial year. In response to the notices, around 6,500 persons have filed returns. Provisional assessment orders, u/s 122C of the Income Tax Ordinance, have been issued in more than 9,000 cases.
Parliamentary Secretary for Finance Rana Afzal Khan said measures adopted by the federal government were bearing fruit as the government had achieved 99 percent revenue collection target till February that year. He also said the government would positively achieve tax collection target set for current fiscal year. To another question, the House was informed that disciplinary proceedings in respect of 14 officials had been initiated, which were under process; criminal proceedings against 37 persons had been initiated for fraudulently obtaining refunds on fake invoices through illegal input adjustments in sales tax.
The collection of income tax does not include any expenditure taxes or Indirect Levies. Income tax is withheld/collected on certain transactions at the time of payment. However, the amount withheld is neither an indirect levy nor a tax on expenditure. It is an advance payment of income tax, which is a direct tax, and is accounted for towards the tax liability of person from whom the tax is withheld at the time of transaction.
The actual contribution of income tax in terms of percentage of GDP has remained 3.2 percent and not below 2.1 percent in year 2012-13. It was also not 3.5 percent during 2004-05 rather it was 2.7 percent in that particular year. It has not continuously decreased rather increased during the said period.
The expected percentage of income tax to GDP ratio is 3.4 percent in 2013-14. The government is cognisant of the importance of direct taxes both for economic and equity reasons. Therefore, in the budget for financial year 2013-14, most of the policy measures relate to income tax and are aimed at raising the share of direct taxes. To another question, the House was informed that according to "The Malala Funds-in-Trust for Girls' Right to Education" agreement signed between Unesco and the government of Pakistan on February 6, 2014, Unesco will spend up to $7 million in Pakistan.
The overall framework of programme is structured through three distinct phases over the period of 36 months: inception (phase-1, started on March 18, 2014) for six months; implementation (phase-2) for 24 months and documentation and sealing up (phase-3) for six months.
The implementation phase will further consist of three components by different intervention sectors, objectives/expected results, with specific activity areas that aim at widening access to education and improve the retention and completion rates of girls through improved quality of education. The programme aims at targeting the hard-to-reach areas of Pakistan.
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