Federal Minister for Planning and Development Division, Makhdoom Shahabuddin on Monday informed the National Assembly that the government is working on a plan to broaden the income tax base and improve direct taxes collection in 2008-2009.
In response to a question on direct taxes collection, he said that the Federal Board of Revenue (FBR) is taking measures to bring new taxpayers into the tax net. Responding to various queries on macro-economic indicators he said that the indicators are gradually improving, as the economy is in the process of stabilisation. The economic indicators like GDP growth and fiscal deficit would be improved under the government agenda on macro-economic stabilisation plan.
In a written reply, Minister of State for Economic Affairs and Statistics Ms Hina Rabbani Khar said that external debt of the country was $43.85 billion as on January 31, 2008. The total amount of the said debt was $48.50 billion as on February 28, 2009. The said debt increased by $4.65 billion.
The stock of "Private Sector Debt" increased by $944 million from $2325 million as on January 31,2008 to $3269 million as on February 28, 2009; and the stock of "SBP Debt" increased by $3691 million from $2434 million as on January 31, 2008 to $6125 million as on February 28, 2009. The increase in SBP's component which on account of IMF's disbursement made under IMF's Standby Arrangement Loan. This loan is imperative for economic stabilisation of the country.
To a question, Minister of Commerce said that the total quantum of trade between Pakistan and Latin/South American countries is $399.6 million during July-December 2008-09. The exports from Pakistan are $176 million and imports to Pakistan are $223.6 million.
Responding to a question, Minister for Commerce Makhdoom Amin Fahim said that the trade deficit during July-December 2008 was $9.6 billion as against $8.3 billion in the corresponding period last year, showing an increase of $1.3 billion. The reasons for this trade deficit are growth in imports outpaced growth in exports during this period. High petroleum import bill during the period due to rising global oil prices. Other factors include higher import of wheat due to local shortage and increase in import of machinery during this period.
The government has taken steps to improve the trade balance and in this regard government has imposed L/C margin on import of all non-essential items since 22nd May, 2008. To a question, Minister for Investment Waqar Ahmed Khan said the incentives for investment provided during the said period included foreign equity up-to 100 percent allowed. The manufacturing Sector has no minimum foreign equity requirement and non-manufacturing Sector requires minimum foreign equity of $0.3 million.
Services Sector (including telecom and IT) minimum foreign equity requires $0.15 million and zero-5% customs duty on import of plant, machinery & equipment. Tax relief in the shape of Initial Depreciation Allowance 50% of machinery cost to all sectors.