Hafeez hints at budget revenue target of Rs2.3tr
ISLAMABAD: Undeterred by the May Day holiday and the raging political storm over the conviction of prime minister in the contempt case, federal Finance Minister Dr Abdul Hafeez Shaikh held a meeting on taxation proposals on Tuesday.
Sources in the Federal Board of Revenue (FBR) said that during the meeting the minister hinted at fixing revenue collection target at Rs2.3 trillion in the budget for 2012-13. This target would be met by widening the tax base rather than by proposing additional taxes or increasing the existing tax rates that would hit the common people directly.
Dr Shaikh also underlined the need for achieving this year’s collection target of Rs1,952 billion. He said the officials failing to meet their targets would be dealt with severely. They would be transferred and adverse remarks would be entered in their annual confidential reports.
An official familiar with the deliberations made during the meeting told Dawn that there seemed little room for additional taxes in the budget as its focus would be on efforts to document the economy.
Tax officials headed by FBR chairman Mumtaz Haider Rizvi briefed Dr Shaikh about the various proposals that were either meant to document the economy or encourage investments. “We cannot increase the existing tax rates or extend the scope of taxes to some products,” the official said.
The tax officials proposed that slabs for the salaried class be reduced from 16 to six. The minimum tax rate should be 10 per cent on taxable incomes of up to Rs1 million, and the maximum rate should be 35 per cent on taxable incomes exceeding Rs10 million.
It was proposed that incomes of more than Rs350,000 be deemed as taxable, which would give relief to the low-salaried people.
The sources said the meeting also deliberated on lowering the GST rate and observed that the move would bring about the desired results only if all the sectors of the economy were documented.
The meeting observed that only between 75,000 and 80,000 people were filing sales tax returns with the department.