Advisor to Prime Minister on Finance Shaukat Tarin said on Wednesday that government would impose tax on stock market, real estate and agriculture sectors in the next three years to broaden the tax-base and raise tax to GDP ratio.
Addressing Islamabad Chamber of Commerce and Industry (ICCI) he said that government would end the power tariff difference between domestic, commercial and industrial consumers and implement uniformed power tariff for all types of consumers.
He said that why should be a difference in power tariff between different types of consumers. He said that government would also impose tax on stock market, real estate and agriculture sectors in the next three years to enhance the revenue collection. He also refused to resume amnesty scheme for the legalisation of the undocumented assets and income.
He said that inflation was at 25 percent in October last year that would be reduced to single digit by July and August. At present the inflation had been reduced to 17-18 percent that was the remarkable success of the current government. The banks are receiving liquidity and banking sector was stable despite the economic recession. He said that government was focusing on reducing the inflationary rate that would result in decreasing the interest rate.
The growth rate had been estimated to remain at 2.5 percent during the current fiscal year and if government had focused on growth rate by borrowing, the inflation had surged up to 35 percent from 25 percent. He said that inflation would further come down during the next year that would help increase in growth rate.
Government wanted to create low inflationary environment, he said adding that world is ready to lend money but government wanted to remove structural imbalances. He said that former government had shown high growth rate that was due to borrowing. It was due to policies of former government that present government had issued Term Financing Certificates (TFCs) worth Rs 80 billion.
"Our main focus is on increasing the revenue and main burden was on manufacturing sector, he said adding that government would bring all other sectors in tax net to enhance the revenue collection. He said that government would end the cross subsidy in the power sector and power tariff differences between different consumers would be abolished.
He further said that government would replace general sales tax with value added tax (VAT). Government intends to impose it on retail level excluding the food items.
Government will focus on manufacturing sector and was working on Corporate Rehabilitation Act for revival of sick industrial units and textile sector will be given incentives to enable it to compete the products of other countries of the world. Government can bring the foreign exchange two sources including exports and remittances. Government will set up export zones in the country. He admitted that power load shedding had affected the industry and assured to end load shedding by end of the current calendar year.
Government is focusing on hydel, coal and wind resources to generate the electricity. Government has formed integrated energy plan to exploit these resources. He informed that country had unexplored gas reserves of 150 trillion cubic feet and had explored only 30 TCF. Government had targeted drilling of 150 to 200 wells in one year. Pakistan had also coal reserves of 180 million tons and urged the federal and provincial government to end differences on the utilisation of coal.
He also rejected the bail out package for the industry and stressed on the restructuring on different industrial sector that could contribute to the economy on the long-term basis. Government had formed that textile group that would hold meeting every month to propose measures for the improvement of the textile industry. He said that government was collecting petroleum development levy (PDL) and there was spending on defence, debt servicing and development. Pakistan was also facing pressure on east and west. Government will reduce the price of diesel when it finds a space in this regard.
He also agreed with the ICCI to form 10-year industrial policy. He said that government would focus on agriculture sector that can grow the economy and he regretted that government imported 15 to 17 lac tons wheat last year. Government will improve the water resources and ensure market access to the farmers.
He regretted that farmers were not given the announced support price and government would procure 6.5 million tons wheat. Government will also maintain 1-1.5 million tons strategic reserves of wheat to intervene the market if private sector exploits the situation.
He further said that government would also launch a programme for the poor people. He said that five million people are living below the poverty line and Rs 1000 per family cash support is a lip service. Government will launch the training programmes for the poor to give vocational training enabling them to get employment. Government will also introduce medical insurance programme for the poor. President ICCI Mian Shaukat Masud said that power load shedding had hurt the industry and urged to take measures to overcome the load shedding in the country. He said that SME sector is constrained by financial and other resources due to which it had not developed its full potential.
He said that oil prices had declined almost by 70 percent but government had not passed on it to the consumers. He demanded to reduce the diesel price.