Finance Minister Abdul Hafeez Shaikh on Saturday said the government wanted to have only two federal taxes ie income tax and sales tax in future by gradual abolition of the federal excise duty (FED). Addressing a post-budget press conference at the Planning Commission, he said there should be only two taxes ie income tax and sales tax.
The government has totally abolished special excise duty on hundreds of items, regulatory duty on 392 items and federal excise duty will be abolished on all items in three years. However, the FED has been abolished on 15 items to show government''s commitment to gradual withdrawal of the FED regime.
He said the identified 2.3 million rich are those who are residing in posh areas such as defence and Sector F-7, having at least two foreign accounts. They spend more than 60 days abroad on business or recreation trips by travelling in expensive travel classes and don''t have national tax numbers and not paying any tax.
He said those who are out of the tax net due to the negligence or their cleverness would be brought into the tax net and tax burden would be shifted to those rich who have been avoiding tax for the last 62 years. Sectors that are still out of the tax net would also be brought into the tax net and than an equitable tax system would be in place.
He said that reforms in the sales tax sides have crossed their over half way mark and we have reduced the rate of standard sales tax rate from 17 percent to 16 percent as per promise made at the flour of the National Assembly. When sales tax reforms to be completed 100 percent than there would be further reduction in sales tax rate, he added.
About the agriculture income tax, the minister desired that income from agriculture should be taxed at par with the income earned from other sources. Under the Constitution, taxing income from agriculture is a provincial subject. When the nation is demanding agriculture income tax, it should be clarified that why this is not being done? He said last meeting of the Council of Common Interests (CCI) chaired by the prime minister and also attended by chief ministers of all four provinces have discussed in detail the issues relating to agriculture tax and there would be visible progress on this tax in near future.