FBR directed to form comprehensive tax policy

LAHORE (APP) - Advisor to Prime Minister on Finance, Shaukat Tarin, has said that Pakistan will have to encourage foreign and local investment, increase exports and improve the ratio of tax to gross domestic product (GDP) for setting right the pace of economy. He was addressing the concluding session of the three-day conference on Tax Policy Options for Pakistan organized by the Federal Board of Revenue (FBR) at a local hotel here on Friday. State Minister for Finance Ms.Hina Rabbani Khar, Chairman FBR Ahmad Waqar, representatives of international financial institutions, economists, businessmen and industrialists were also present on the occasion. "We'll have to take solid measures like expansion of the tax net for the growth of GDP as it is done by the developed countries of the world for which expansion of tax net," he added. He said steps will have to be taken to bring down rate of inflation to single digit for the overall economic growth. For the last few years, he said, the economic indicators were showing downward trend which had affected the pace of industrialization, investment and trade in the country. Highlighting the basic principles of economic growth, he said the decrease in the markup on debts and arresting inflation are directly linked to positive indicators of economy for which tax to ratio of GDP would have to be improved and investment, foreign and local, would have to be encouraged. Shaukat Tarin said that the tax collection rate in some of the sectors of economy had been very low and did not exist in some instances; they can be included in the tax net by removing complicated mechanisms. Therefore, he said, business-friendly tax policy is the need of the hour. He said that in order to expand the sphere of GST and income tax, the government would take into confidence all the stakeholders while evolving the tax policy and their suggestions would be paid heed to. The FBR, being an autonomous body, would have to lay down an integrated tax collection system to rope in willful defaulters into the tax net. The Advisor also stressed the need for revamping the tax-gathering system on modern lines, incorporating techniques and policies prevalent in developed countries. He said that social and economic growth rate will have to be increased for the economy to pick up which would not only broaden the tax base but also help alleviate poverty from the country. He laid special attention to increasing the volume of exports. The government is providing subsidy to various sectors which is burdening the government's economic load, he said. However, at this crucial juncture, Pakistan must evolve such a tax policy which can encompass all economic sectors and is inclusive of the qualities of a healthy tax system, he stressed. He disclosed that FBR is formulating a comprehensive policy in order to bring further changes in income tax and GST. He said that the government was making a big effort to bring down inflation rate and assured that it would fall.

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