Chairman Federal Board of Revenue (FBR) Tariq Bajwa stated that a decline in oil prices is going to have positive impact on overall economic growth as it would enhance industrial units' competitiveness. Bajwa told a Senate committee here on Friday that government has been making efforts to reach an arrangement with foreign countries, especially Switzerland and the UAE, for information sharing to know about the wealth of Pakistanis in their banks as well as properties and other assets purchased by them.
The Chairman, however, regretted that authorities were facing difficulties in this regard. The committee members inquired from the Chairman FBR why letters were not written to big businessmen and politicians to show their foreign properties and wealth in their tax returns. The Chairman said that it was mandatory for every return filer to reflect their local and foreign investment, if any, in the return. Bajwa, however, stated that problem for the tax officials was that their assets and properties abroad were not in their own names. He said the government has requested the Dubai government to give us information of Pakistani investors in their country.
Bajwa added the government would suffer a revenue loss of Rs 68 billion due to a decline in oil import bill to $11.5 billion as compared to $15 billion for the previous year. The decline in oil prices would cost the overall revenue collection in the current fiscal year but there is also an opportunity for the economy for moving towards higher growth. He said that overall cost of garment sector has declined by 9 per cent due to a decrease in oil prices and now the captive power plants can be operated by industrial units for 24 hours due to cheap furnace oil price. He said the per unit electricity price has been reduced by Rs 2 due to a decline in oil prices.
Chairman Federal Board of Revenue Tariq Bajwa said that in 2013, the number of tax returns filed was 710,000 and it has soared to 771,000 in 2014 so far. He hoped that this year the number of returns will reach the 900,000 mark. Bajwa said that according to the Constitution, the government cannot impose taxes; however, the parliament through clause (b) of the sub section (2) of the section 3 of the Sale Tax Act, 1990, has authorised the federal government to increase or decrease the rate of sales tax on any taxable supplies.
The committee also held a discussion that it should recommend a constitutional amendment to declare agriculture tax as federal subject, but some members argued that there is a need of more discussion on the subject. However, the committee recommended that provincial governments must start issuing Provincial Tax Numbers (PTNs) in addition to the National Tax Numbers (NTNs) to bring the agriculture income into tax net. The committee decided to suggest the Inter-provincial Co-ordination Committee to call a meeting of the provincial revenue departments to address the issue.
The meeting was attended, among others, by Senator Haji Muhammad Adeel, Senator Syeda Sughra Imam, Senator Kalsoom Parveen, Senator Fateh Muhammad Muhammad Hasni, Senator Malik Muhammad Rajwana, Chairman OGRA Seed Ahmed, Chairman FBR Tariq Bajwa and Additional Secretary Senate Shujaat Ali.