ISLAMABAD, Jan 29 (APP):Minister of State for Revenue Hammad Azhar Tuesday said the economy was moving towards stabilization and the supplementary budget was a new beginning, setting stage for further measures for ease of doing business.
He was responding here in Senate to a calling attention notice of Pakistan Peoples Party Senator Sherry Rehman who had drawn attention of the finance minister towards missing of revenue collection target of Rs175 billion by the Federal Board of Revenue.The minister said the business sector had appreciated the supplementary budget which would have an adverse impact of Rs6.8 billion on tax collection.
The measures stifling the business sector would be reversed and steps would be taken for promotion of agriculture and business sectors, he added.
Hammad Azhar said revenue shortfall could not cause slow down in the economy.
The shortfall in tax collection was of Rs162 billion and one of the cause was that when the government came the oil was selling in the international market at $ 70 per barrel which later went up to $ 85 per barrel.
He said in view of the oil prices, the PTI government reduced the sales tax from 17 percent to 2.5 percent and then the Brent crude came down to $ 52 per barrel and the sales tax was again hiked to 17 percent. The government bore the burden of Rs 60-70 billion because of fluctuation in the oil prices.
He informed that in the past, sales tax on oil was used to collect revenue instead of passing on relief to the common man. The government had not taken measures to collect indirect taxes, he continued.
He said projection was the government would collect tax from telecommunication products overcoming the shortfall of Rs50 billion in revenue caused due to the relief given to consumers on sale of mobile cards by the Supreme Court.
The government was in the Supreme Court and hopefully stay in a case would be vacated and the government
would be allowed to collect revenue from telecommunication sector, he added.
He said due to tax measures related to auto sector, the revenue shortfall had widened but the government had rectified the situation which would lead to more collection from the auto sector and reduction in revenue deficit.
The minister said the anti-smuggling measures for mobile phones would come into effect that would boost tax collection while further revenues would also be garnered from gas sector.
He said in the past, PPP did not meet its tax collection targets for five years. During the last year of the PML-N government, the shortfall was Rs160 billion against the collection target of Rs4,013 billion, he added.
In the last finance bill, no tax was imposed while regulatory duty was only levied on luxury items, he added.
Sherry Rehman in remarks about her notice, said the tax collection was falling and the basic issues facing the economy were not being resolved.
The only change that had taken place that development budget was cut, Sherry said adding Sindh government had achieved its revenue collection target.