Circular debt stands at Rs80bn, NA body told
ISLAMABAD: The National Assembly’s Standing Committee on Finance has proposed a range of taxation measures to document the economy.
A meeting of the committee presided over by Fouzia Wahab on Friday discussed the main features of the 2012-13 budget and the medium-term budgetary framework.
Finance Secretary Abdul Wajid Rana briefed the committee on the government’s four years performance — a task usually performed by the finance minister. He said the government had made a payment of Rs1 trillion for clearing the circular debt over the past four years. Now the circular debt stood only at Rs80 billion, he added.
Most members of the committee asked if the circular debt amount was not so large why the government was not making full payment to tide over the power crisis.
Mr Rana said Rs7 billion had been paid to independent power producers (IPPs) on Friday and about Rs17 billion two weeks ago. However, he said the circular debt kept piling up after every three months.
Ms Wahab suggested an institutional understanding between the National Database and Registration Authority (Nadra) and the Federal Board of Revenue. She said property transactions should be declared as normal business and brought under the federal income tax.
She said all banks should be directed to make profiles of people who had more than Rs1 million in their accounts, but did not pay taxes. She also called for making a database of automobile owners to detect tax evaders.
The committee suggested that the FBR should create a balance between direct and indirect taxes vis-à-vis their shares in tax-to-GDP ratio.
This ratio should be equalised from the present 37 per cent for direct taxes and 73 per cent for indirect taxes.
Kashmala Tariq criticised the delay in holding the committee’s meetings. The last meeting was held in January.
She and other members also voiced concern over the absence of Finance Minister Abdul Hafeez Shaikh. “The minister has no time to attend such meetings and brief parliamentarians on the performance of the economy,” one of them regretted.
The finance secretary said fiscal deficit stood at 4.3 per cent of GDP without consolidation of arrears this year, as compared to 4.6 per cent last year. Tax collection by the FBR increased by 23 per cent to Rs1416 billion till April, compared to Rs1150 billion during the same period last year.