ISLAMABAD: Finance Minister Miftah Ismail said Monday that an agreement is likely to reach with the International Monetary Fund (IMF) in a day or two as there is no deadlock on the issue of personal income tax reforms for the salaried class.

Talking to media persons after attending the Senate Standing Committee on Finance presided over by Senator Saleem Mandviwala, he said that there would be tax exemption on up to Rs1.2 million monthly income of the salaried class. He further stated that the wealthy people would be taxed and the poor would be provided relief.

The finance minister said that it is being considered to impose a tax on non-productive properties.

Ismail said that there would be a $6.5 billion import of palm oil in the coming fiscal year and the country does not have $6.5 billion.

Prime Minister Shehbaz Sharif is not happy over the increase in taxes, said the finance minister and added that he wanted tax cuts particularly for the salaried class. He said that he has asked the prime minister how the income will increase if “I do not increase taxes”.

FBR chairman explains importance of increase in tax rates for salaried people

He said that estimate suggests that 80 tonnes of gold is being smuggled into Pakistan, whereas, only 15 kg of gold is legally imported. He said that the government would be reducing duty on gold imports.

Officials of the Pakistan Pharmaceutical Association informed the federal minister of finance about their concerns regarding the non-payment of the sales tax refund.

Finance Minister Ismail expressed his commitment to resolving the issue of refunds as soon as possible.

Former Finance Minister Senator Shaukat Tarin attended the meeting of the finance committee and stated that sales tax on pharmaceutical companies was introduced for their documentation. He said that the same sector which was producing medicines was also making juices and makeup products but were not paying taxes.

He said that the Federal Board of Revenue (FBR) has automated the refund system.

He further stated that if their refunds were stopped it means that their documentation was incomplete and the government should not back out from such a decision.

The former finance minister warned of skyrocketing inflation of 35 per cent and that the government would be unable to control expenditures.

He said that the expenditure is expected to increase and there is a need to increase the FBR tax collection target for the next fiscal year. He said that there should be no fixed tax on retailers.

Tarin also suggested to the government to impose a 17 per cent sales tax on jewellers and sales tax should also be imposed on retailers. He wanted that the tax should be imposed on the pension and provident fund, and tax should not be imposed on small pensions and provident funds.

The meeting was attended by Federal Minister for Finance Miftah Ismail, Minister of State for Finance Dr Aisha Ghous Pasha, senators, Talha Mahmood, Mohsin Aziz, Zeeshan Khanzada, Saadia Abbasi, Anwarul Haq Kakar, Dilawar Khan, Shaukat Fayyaz Ahmad Tarin, the FBR chairman, and senior officials from the Ministry of Finance.

The Senate Standing Committee on Finance had invited the cellular mobile industry in their meeting on June 17 to get input on budget proposals related to the telecom industry. The representatives of three mobile operators provided suggestions on rationalisation of GST on telecom services as well as reduction of taxation which the industry is already raising at various forums. Increase of any additional duties such as on import of fibre was also discussed which will potentially slow down the enhancement of fibre infrastructure, critical for internet connectivity across the country. The difficulties faced by operators, including the current spell of electricity load shedding as the potential impediment to provision of round-the-clock mobile services was also highlighted. The mobile operators are governed under license conditions, rules and regulations issued by PTA. Operators are required to provide uninterrupted telecom services to the subscribers and in case they don’t, the regulator has relevant provisions to take appropriate action. The Committee reviewed and finalized the budget recommendations made in the previous meetings of the Committee, regarding Finance Bill 2022-23.

A detailed report containing the budget recommendations made by the Standing Committee will be presented in the Senate session.

Copyright Business Recorder, 2022