Ahead of general elections 2018, the government is unlikely to increase taxes in the upcoming budget of 2018-19 that can put more pressure on businesses and common people of Pakistan.
During the discussion with Federal Board of Revenue officials on Thursday, it was revealed that government has no plans to impose taxes on the businesses and people during the fiscal year 2018-19, the government is also mulling to provide relief to the business community in order to improve its economic situation.
According to Rana Afzal Khan, Minister of State for Finance, the government is considering a pro-people budget for the next fiscal year 2018-19. He said in a statement, “The government will only put limited taxes in the upcoming budget if needed.”
The current government is going to announce the budget 2018-19 on April 27 which is one month before the schedule due to the Holy month of Ramazan and the general elections. The government is going to present the sixth budget of its tenure making it the first government in the history which is going to announce six budgets during the five-year tenure.
However, the government has raised the target for tax collection; previously it set the target of Rs4 trillion in tax collection, while for the next fiscal year 2018-19 it has the target of Rs4.5 trillion. FBR will propose the withholding taxes for the non-filers as it had already implemented in the last few years, said anonymous FBR official, he further elaborated that the government will not pressurize the existing taxpayers.
The good news is the government is serious about providing relief to working class by bringing the salaries threshold further down, the government would exclude low-income people from paying income tax by raising the bracket of Rs.400,000 per annum—he added.
According to another official FBR, “The government may consider the proposal of Overseas Investors Chamber of Commerce and Industry (OICCI) in order to remove Super Tax in the new budget”. The OICCI has already requested the government to remove super tax at 3% for individual and corporate and 4% for banking organizations, which was imposed referring Finance Act 2015. The FBR will also eliminate 5% tax on bonus shares which was imposed according to the Finance Act 2014.
For revenue generation, the government is focusing on targeting luxury and non-essential items, raising the duties on imported items might be recommended by the FBR, this would help the country to decrease imports in order to create a balance between imports and exports reducing the trade deficit which is critical for economic growth.
The FBR has collected 17.65% more revenue during the first eight months of the current fiscal year as compared to the corresponding period last fiscal year.