The Standing Committee on Finance of the National Assembly has expressed dissatisfaction over the government claims of making reforms in the Federal Board of Revenue (FBR), saying reforms are only in statements.
"We are not satisfied with the reforms in the FBR," was the unanimous view of the committee with members stating that one does not know how the tax authorities would collect additional Rs900 billion taxes in the next fiscal year as agreed with the International Monetary Fund (IMF).
The committee meeting was chaired by Faiz Ullah, and after he had to depart for Faisalabad to attend a funeral, the meeting was presided over by Syed Naveed Qamar.
Ayesha Ghaus Pasha said that not a single project had been included in the next fiscal year PSDP for improvement in input/output matrix and capacity building of the FBR for revenue mobilization.
She said that the FBR had to collect tax of Rs900 billion in the next fiscal year to meet tax target agreed with the IMF.
"We have no idea how this would be achieved without capacity building of the FBR and improvement in the software, whereas all the FBR projects proposed for the PSDP are related to the construction of buildings," Pasha added.
The committee also remarked that the FBR should revisit its policy of tax collection and unless economy flourishes, the tax collection would not increase and stated that the country had been facing economic inactivity owing to tax measures of the FBR, and there was time to decided, whether the government wanted to increase tax collection through flouring economic activities or at the cost of economy.
The committee meeting also discussed the issues being faced by textile exporters.
The committee members were of the view that a sub-committee had already been appointed in this regard; therefore, this matter may be pended till the final outcome of the sub-committee.
The committee requested the stakeholders present to submit their issues in the meeting of the sub-committee.
Chairman of the Committee Faiz Ullah informed the committee that the prime minister had decided to freeze the gas and electricity tariff at 6.5 cent and at 7.5 dollars per MMBTU for export-oriented sectors.
The textile exporters stated that power distribution companies had not adjusted surcharges etc.
The exporters also complained that the promise to clear sales tax a refund in 72 hours was not being honored even in 72 days.
The exporters also maintained that their pending claims in the FBR are creating liquidity issues for them.
The committee also decided that as its recommendations are binding on the government, it must have the powers to review the Finance Bill as well as Budget Strategy Paper and Public Sector Development Program (PSDP) before their presentation in the parliament for approval, and decided to take up the matter with the speaker of the National Assembly, and in the Parliament.
The additional secretary, Ministry of Finance briefed the committee about the ongoing and the new Public Sector Development Projects fall under the purview of the Finance Division, the committee made its deliberations on project to project basis.
The committee recommended the PSDP for financial year 2020-21 of the Finance Division. The committee recommended that the State Bank of Pakistan (SBP) may be asked to provide their views about the future up-gradation of Pakistan Mint as per the SBP requirements. The committee discussed the PSDP 2020-21, schemes of the FBR. The members have expressed their concerns over the proposed schemes by the FBR.
The committee was of the stance that the FBR proposed schemes were not supported by its vision for broadening of Revenue System in the country.
However, Additional Secretary, Ministry of Finance, clarified that a separate programme for tax reforms has already been initiated by the FBR to increase revenue.
The committee directed the FBR to prioritize their schemes before making the request to include the same in the budget for Financial Year 2020-21 and suggested that the federal government should include 200 to 300 projects in the PSDP instead of 1,200, and ensure their timely completion to avert cost escalation.
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