| Finance minister says the Fund has nothing to do with salaries increase | Tax exemption on annual income below Rs1.2m will remain in place | PM directs finance team to reduce tax rates

 

 

ISLAMABAD    -   Federal Minister for Finance and Revenue Miftah Ismail on Monday said that an agreement to revive the loan programme with International Monetary Fund (IMF) is expected to be finalized within a day or two.

“I am very hopeful that the IMF programme will be revived within a day or two,” said the Finance Minister while talking to the media after a meeting of the Senate Standing Committee on Finance and Revenue yesterday.

He clarified that IMF has nothing to do with the salary increase of the government’s employees in the annual budget. “IMF has no relation with the increase in salaries. Also, the tax exemption to the people earning below Rs1.2 million [annually] will remain in place”. However, the wealthy people should pay their due tax, he added.

Talking about the proposed taxes on property, the Finance Minister said that the government would withdraw taxes once construction starts on an empty plot. “Lay one brick on the empty land and the taxes will be lifted. But we will not impose a tax on anyone who has not acquired the possession of a plot or has not received the permission to start construction on it,” Miftah explained.

He further clarified that if a person has been granted permission to start construction on a piece of land and they still do not begin building something on it, then they will have to pay the tax.

The Senate Standing Committee on Finance, Revenue and Economic Affairs was held here at Parliament House under the chairmanship of Senator Saleem Mandviwala. Officials of Pakistan Pharmaceutical Association informed the Federal Minister of Finance about their concerns regarding non-payment of sales tax refund. Former Finance Minister Shaukat Tarin informed the committee that their government had introduced reforms for documenting the pharmaceutical sector. He explained that the pharmaceutical sector is not only manufacturing medicines but they are also making juices and cosmetic items and enjoying tax relief on the name of medicines. He said that incumbent government should not rollback the reforms.

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

He said that Prime Minister Shehbaz Sharif gets annoyed on increasing taxes. The PM is continuously asking me to reduce the taxes rates. However, I asked him how to increase the country’s revenue without increasing taxes, Miftah said. He informed the committee that government has reduced the duty on import of gold to discourage the smuggling in the country. Around 15kg gold has come to country through legal way in last year. Meanwhile, 80 tons of gold came through smuggling in the country, he added.  Finance Minister said that government has imposed duty on import of palm oil.

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.

Earlier, State Minister for Finance Dr Aisha Ghaus Pasha informed the committee that the previous government had agreed with the IMF to implement personal income tax reforms and other measures and had signed an agreement. The current government is merely completing the business, she added.

She further said that the previous government also agreed to implement measures to slap the petroleum development levy on petroleum products and increase power tariffs. The incumbent government was not going beyond implementing the deal signed by the previous government with the IMF.