ISLAMABAD: The federal cabinet has expressed serious concern over low tax to GDP ratio and directed Finance Ministry to submit a comprehensive plan for broadening the tax base to mobilize growth in revenue collection.
Addressing a news conference after the cabinet meeting, Information Minister Chaudhry Fawad Hussain stated that the federal cabinet has asked the Finance Ministry to prepare a comprehensive plan to tap the revenue potential in the country. The meeting also wanted details of those measures that were planned in the past but were not implemented for some reasons, so that they might be implemented if the present government supports them.
The minister further stated that federal cabinet expressed serious concerns when it was informed that only 70,000 people are revealing their income over Rs 200,000 in their returns filed to Federal Board of Revenue (FBR) and questioned how state affairs can be run with this state of tax collection.
The minister stated that he would move a resolution in the Parliament for construction of parliamentary commission similar to the one constituted on allegations of election rigging to investigate and fix responsibility against those harming the economy during the last ten years. He said that opposition should support the resolution in the Parliament if it considers that economic mess faced by the present government was not created by it. The minister said that the Prime Minister also wanted to know as to where Rs 24,000 billion loans taken during the last 10 years were utilized and the finance minister was asked to submit a comprehensive report with details from where the amount was borrowed and on which projects it was spent.
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The minister said that the cabinet has decided to launch a crackdown against the illicit trade of cigarettes after it was informed that 98 percent tax from cigarette sector, that is Rs 77 billion, is being paid by only two companies and the remaining companies are doing illicit business of cigarettes.
The minister said that the government has also finalized a mechanism to make working of smuggled mobile phones non-functional. The Prime Minister has convened a meeting of State Bank of Pakistan today (Friday) to finalize remittance initiative to channelize informal remittances.
The federal cabinet has also appointed Air Marshal Arshad Khan (retd) as new chairman of Pakistan International Airlines (PIA), the minister said while adding that PIA restructuring plan was submitted to the Finance Ministry and it will be placed before the cabinet meeting for discussion and approval on return of the finance minister from abroad. The minister said that PIA losses have reached Rs 406 billion.
Replying to a question, he said the government will ensure the employees’ jobs are not affected while taking any decision about the entity after turning it around.
The minister stated that the federal cabinet has decided the modalities of the Naya Pakistan Housing Scheme after a great discussion to introduce mortgage model in the country where the government will provide land to low-income groups at subsidized rates and private sector will make investment for construction of house. He said that financing facility will be provided by banks against the collateral of land that will be transferred to the owners by the government.
Fawad stated that cost of New Islamabad International Airport rose from Rs 38 billion to Rs 100 billion and the Prime Minister and cabinet have decided to carry out a detailed audit of the project to find out the reasons for cost escalation. The cabinet has also directed the NAB chairman to launch investigation and bring before the nation the facts for cost escalation. Moreover, probe should also be expedited in high profile cases.
The minister said that there are over 3,000 people on the Exit Control List (ECL) and the Prime Minister has directed the state minister for interior to look into the list, adding the Prime Minister appreciated the state minister for interior for launching a drive against encroachments. He said the cabinet has also approved relaxation in PPRA rules for procurement of urea for Rabi crop.
The cabinet also constituted a committee headed by Advisor to Prime Minister on Commerce Abdul Razzak Dawood on partnership of K-Electric with Shanghai Power and directed it to finalize the partnership by October 25, 2018.
(This news/article originally appeared in Business Recorder on October 12th, 2018)