Finance advisor says the rich, businesses to be taxed to meet Pakistan’s revenue targets

US Special Representative for Afghanistan & Pakistan Richard Holbrooke (L), co-chairs a session with Pakistan's Finance Minister Abdul Hafeez Shaikh during the Pakistan Development Forum in Islamabad November 14, 2010. (Reuters)
Updated 13 June 2019

Finance advisor says the rich, businesses to be taxed to meet Pakistan’s revenue targets

  • Rs.8.2 trillion budget released on Tuesday for the fiscal year to June 2020
  • Pakistani stocks rose on Wednesday, business community gave mixed reviews of PM Khan’s first budget

ISLAMABAD: De facto Pakistani finance minister Hafeez Shaikh said on Wednesday the government would collect more taxes from the rich as well as businesses to meet the ambitious tax collection target of Rs5.5 trillion ($36 billion) set in the annual budget.

The Rs.8.2 trillion budget released on Tuesday for the fiscal year to June 2020 underlined the scale of the economic challenges faced by the government of Pakistan, including pushing ahead with reforms and measures to curb ballooning current and fiscal account deficits.

Successive governments have promised to rein in tax evaders and boost revenues but face fierce resistance to change, including from the many politicians and businessmen believed to be among those dodging their taxes. Only 1.8 million people file income tax returns in the fast-growing South Asian nation with a population of 208 million and a large informal economy.

“If we want to stand tall in the comity of nations, we will have to collect our taxes,” Shaikh told reporters at a post-budget press briefing in Islamabad. “And for that, if we have to offend some people, we are ready to do it.”

Listing the major sectors from which the government expected to collect more revenue, he said businesses would be taxed on products sold in the domestic market but continue to avail the zero-rated tax facility on exports.

Shaikh said the government also planned to collect sales tax from the industrial sector on different goods at the manufacturing stage to put an end to tax evasion.

“The government is also abolishing the distinction between tax filers and non-tax filers,” he said, adding that if a person failed to become a tax filer while purchasing property or a car, he would receive a tax liability after a 45-day limit lapsed.

“All these measures will have a far-reaching impact and help increase the tax base,” he said, adding that a sectorial analysis was also being carried out to collect more taxes from the businesses. “This is an ambitious revenue target, but we are hopeful to achieve it with our collective efforts.”

Pakistani stocks rose on Wednesday and the business community gave mixed reviews of Prime Minister Imran Khan’s first budget aimed at securing a $6 billion bailout from the International Monetary Fund (IMF).

The government had been forecasting growth of 4% for the next financial year, but after Revenue Minister Hammad Azhar delivered his budget speech, the government released a budget document showing it trimmed its growth estimate for the coming year to 2.4%.

The government has already slashed its year to June 2019 growth forecast to 3.3% from the 6.2% predicted at the time of the last budget. The IMF’s estimates growth of around 2.9%.

Inflation, which hit 9% in May, is seen at 11-13% during fiscal year 2019/2020.

Talking about the priorities of the Khan-led government in the coming fiscal year, Shaikh said it had allocated Rs407 billion for social safety programmes and given subsidies to the poor on utility bills. The government had increased the annual development budget from Rs550 billion to Rs950 billion to create jobs and build infrastructure like road networks and dams, he said.

Shaikh also announced that the government had allocated Rs152 billion for the development of the tribal districts and to incentivize the private sector.

“Despite fiscal constraints, we are committed to protect our poor and try to eliminate the difference between rich and poor through our just economic policies,” he added.

Pakistan cruises to 2nd Twenty20 win vs Bangladesh

Updated 25 January 2020

Pakistan cruises to 2nd Twenty20 win vs Bangladesh

  • Babar Azam, who was out for zero on Friday in Pakistan’s five-wicket win, remained not out on 66
  • Bangladesh’s top-order batsmen struggled for the second consecutive day as the side was restricted to 136-6

LAHORE: Captain Babar Azam and recalled Mohammad Hafeez struck unbeaten half centuries as Pakistan cruised to a nine-wicket victory over Bangladesh in the second Twenty20 on Saturday and kept alive its hopes of retaining the No. 1 ranking.
Pakistan could stay top if it completes a 3-0 clean sweep by winning the final Twenty20 of the three-match series on Monday.
Recalled 39-year-old Hafeez made an unbeaten 67 off 49 balls while No. 1-ranked Twenty20 batsman Babar remained not out on 66 as Pakistan eased to 137-1 with more than three overs to spare.
Both batsmen entertained a weekend crowd of around 20,000 at the Qaddafi Stadium with a splendid 131-run stand against a listless Bangladesh bowling attack.
Shafiul Islam was the lone successful bowler when he had Ahsan Ali caught at mid off for a duck in his first over before Babar and Hafeez took charge. Bangladesh’s disappointing performance was summed up when wicketkeeper Liton Das dropped Hafeez soon after he had reached his half century.
Hafeez, who completed his half century with two successive fours off Shafiul in the 13th over, struck nine fours and a six while Babar, who was out for zero on Friday in Pakistan’s five-wicket win, hit seven boundaries and a six.
In the absence of the banned Shakib Al Hasan and Mushfiqur Rahim, who pulled out of the tour due to security concerns, Bangladesh’s top-order batsmen struggled for the second consecutive day as the side was restricted to 136-6.
Earlier, opening batsman Tamim Iqbal labored for 53 balls on his way to a top score of 65 before he was run out in the 18th over as the Bangladesh innings struggled to build any momentum against the Pakistan pace attack.
The inexperienced pace trio of Mohammad Hasnain (2-20), Shaheen Afridi (1-22) and Haris Rauf (1-27) combined to bowl 12 overs, conceding only 69 runs between them and sharing four wickets.
Captain Mahmudullah, who won his second successive toss, surprisingly didn’t put himself in the top order while another experienced batsman, Soumya Sarkar, came in after the fall of Tamim’s wicket with only 14 balls left in the innings.
Bangladesh will round out the first phase of the Pakistan tour on Monday. The team didn’t want to stay in Pakistan for more than a week due to security concerns.
The tour was only finalized last week when Bangladesh agreed to split the Twenty20 series and the two ICC World Test Championship matches into three phases after the countries’ national cricket boards reached consensus in Dubai during a meeting facilitated by International Cricket Council chairman Shashank Manohar.
Bangladesh will return for the first test in Rawalpindi from Feb. 7-11. After a break of almost two months, Bangladesh will play an ODI and the second test in Karachi on April 3-9.
Late last year, Sri Lanka also split its tour to Pakistan into two phases when it played a Twenty20 series in Lahore and then returned in December for two test matches in Rawalpindi and Karachi, staying in Pakistan for 16 days.