ISLAMABAD: The federal government has decided not to play around in a big way to increase the tax rates in the upcoming budget for 2012-13, but there would be some marginal adjustments in the existing structure of duties and taxes. An official of the Finance Ministry said the broader outlines for the next budget are.
"The government is not going to play around in a big way to increase the tax rates. Neither the government is going for a wholesale new tax". He said the federal excise duty (FED) on some items would be phased out and customs duty on a large number of items would remain unchanged.
He said that some slight changes are also expected in the corporate tax rate but this does not mean that it would be increased from 35% to 40% in the next fiscal year budget neither GST would be increased from existing 16% to 18%. He said the slabs in the tax require simplification which would be done keeping in view revenue consideration. The official said the gap between actual and stated tax regime would be narrowed by doing away with SROs and administration order allowing exemptions. The government effort would be to rationalise tariff at the import stage. He said that a balance would be struck keeping in view the tariff protection required to the local industries. There are many issues in slabs of the import tariffs and these need simplification to minimise the difficulties faced by importers.
He said this would be given due consideration that tariff rationalisation should not undermine the growth objectives and help promote investment in desired sectors of the economy. The government would continue with the policy to move towards two domestic taxes - sales tax and income tax - with phasing out of federal excise duty in budget 2012-13.