Minister for Finance and Revenue Senator Mohammad Ishaq dar reiterated that Pakistan was an asset rich country and it could survive without any support from the International Monetary Fund (IMF). Briefing the Senate’s Standing Committee on Finance and Revenue, the minister stated that the annual budget had been prepared without the Fund’s consultation, whose reservations could be addressed
He told the committee, which met with Senator Saleem Mandviwala in the chair, that the information technology (IT), agriculture and SME sectors were ‘drivers of growth’ and exemptions given to those sectors were inevitable for the economic growth of the country, which currently stood at 0.29 percent.
He said the annual budget allowed freelancers to retain 35 percent of their revenue. Besides, freelancers earning $ 2,000 were exempted from sales tax and they could also procure duty free hardware.
He maintained that in the current fiscal year, a return of $ 2.5 billion was expected from the IT industry, which would reach $4.5 billion by next year. The exemptions were given to the industry keeping in view its potential growth, he added.
The minister said import restrictions were imposed to curb the massive inflows. The external debt of the country had increased from $70 billion to $100 billion in the Pakistan Tehreek-e-Insaf regime, which was clearly an outcome of its financial indiscipline, he added.
He said expenditure bill should be made by keeping in view the external debt and import restrictions would be uplifted by June 30.
Ishaq Dar said as far as prevention of illegal border trade was concerned, coordination among intelligence agencies and the Federal Board of Revenue (FBR) was of vital importance and deliberations with authorities concerned had also been conducted for in that regard.
Ishaq dar said fixation of tariff was a prerogative of the Commerce Ministry and their recommendation would be forwarded to it.
Senator Zeeshan Khanzada highlighted the issues confronted by the industry in opening of letters of credit (LC’s) opening and inquired as to what steps had been taken by the Finance Ministry for the repression of illegal border trade.
Senator Mian Abdul Qadir said final tax of 7.5 percent on the construction companies had been changed into initial tax with an increase of 1 percent. Besides that, an assessment would also be conducted on their payments, he added.
He suggested that the current 8.5 percent tax should be charged as final tax not as an initial tax.
The committee directed the ministry to look into matter.
Representatives of auto spare parts dealers and FATA Steel Mills Association also submitted their proposals for reduction in sales taxes and customs duty to the committee, which forwarded them to the Finance Ministry for consideration.
