islamabad

The Federal Board of Revenue (FBR) is mulling for unfriendly taxation measures in the budget for the next financial year 2013-14 that included increase in general sales tax by one percent; increase GST on sugar and to impose federal excise duty on several commodities.

Sources informed that newly-elected Pakistan Muslim League Nawaz (PML-N) government would take final decision regarding new taxation measures in the budget for the upcoming financial year. According to the FBR’s plan, the government could accumulate Rs 35 to 40 billion by increasing the standard rate of GST from 16 to 17 percent. Similarly, the government could generate Rs eight to ten billion by taking GST to standard rate on sugar from existing eight per cent. These two taxation measures would fuel the inflation in the country. Another measure under discussion is the reduction of federal excise duty slabs on cigarettes from three to two, which will generate an additional Rs12 billion in revenues.

Similarly, the FBR is considering increasing tax on all imports by one percent that would increase the prices of imported commodities in the country.

The FBR would also withdraw zero rating facility and would impose two to three percent tax wherein there is no tax at present. Sources informed that government might keep revenue collection in the range of Rs 2400 to Rs 2500 billion for the fiscal year 2013-14. The Federal Board of Revenue has proposed load of taxation measures of Rs 200 billion in the next financial year 2013-14.

Meanwhile, there are reports that caretaker government might introduce all these taxation measures through presidential ordinance in a shape of “mini budget” ahead of announcement of federal budget. The Nation has tried several times to contact Chairman FBR Ansar Javed and official spokesperson Riffat Shaheen to take their comments regarding introducing mini budget but they did not attend their cell phones.

Lahore Staff Reporter adds: Industry circles observed that the FBR has not taken stakeholders into confidence and instead of widening tax net they have adopted traditional way to squeeze those who already pay taxes. They said any move to add taxes to export sector would be blunder and detrimental to our economy. FBR must realize that due to the energy crisis, impact of war on terror, law & order situation our cost of doing business is highest in the region. Pakistan is losing its ground and competitiveness against regional countries, China, India, Bangladesh, and Sri-Lanka.

Export Sector must be facilitated to earn foreign exchange for the Country and it should not be used for revenue collection as is done all over the world. For FBR it is easy to collect revenue from export sector inshape of WHT but it can be done without any increase in this WHT.

Agha Saiddain, Chairman Pakistan Tanners Association said that FBR may bring export friendly policies and export targets may be fixed at higher side. With increased exports they can raise revenue through previous rate of WHT and Country will get Foreign Exchange and people will get employment.

Agha said any increase in WHT of Export Sector would be extremely short sighted and damaging to our exports.