Emphasising constructive dialogue over confrontation, Finance Minister Muhammad Aurangzeb said that the government will meet business community leaders on July 15 (Tuesday) to explain the rationale behind tax-related amendments.
“This is not about pressure, we will engage with them and explain to them why the amendments were made,” he said, while addressing the Overseas Investors Chamber of Commerce and Industry (OICCI) on Monday.
The remarks come after the chambers of commerce and trade associations have called for a nationwide strike and demonstrations on July 19.
According to business community leaders, the government has invited presidents of various chambers of commerce and office-bearers of associations to Islamabad for discussions on proposed tax reforms, retail tax, and other fiscal matters.
Addressing media persons, Aurangzeb said that Pakistan’s fiscal situation has improved, as the government’s requirement to borrow has declined. “The government also buy back some of its debt, which improved the bank’s liquidity position and its ability to lend to the private sector.”
He said that not only lending to the priority sector, banks should also help the government in its privatisation and restructuring agenda.
“In collaboration with sponsors, banks should try to revive sick units,” Aurangzeb said.
The finance minister said that OICCI’s recent survey reflected a significant improvement in overall business confidence.
He informed that the government has repatriated roughly $2.3 billion of outstanding dividends and profits in the last fiscal year.
Aurangzeb sought OICCI’s assistance on the ongoing structural reforms in the Federal Board of Revenue (FBR).
Talking about changes in sales tax law, the finance minister said safeguards have been built into the new sales tax law to prevent abuse in the crackdown on tax evaders.
He said that the government intends to simplify the tax filing process and has introduced an electronic income tax return form for individuals.
“We are seeking recommendations from stakeholders to further simplify this process,” he said.
Talking about the salaried class, Aurangzeb said the government lessened their tax burden in the given fiscal space. “It is a signal from our side that we want to bring further reduction (in taxes),” he said.
Aurangzeb informed that the government has disbursed Rs75 billion in sales tax refunds to exporters this month.
To a query, Aurangzeb responded that the government is monitoring commodity prices on a monthly basis.
He said that other sectors, including real estate, agriculture, wholesale and the trading community, need to start contributing to the GDP.
To a query, Aurangzeb responded that the pharma sector has shown remarkable performance in the recent period. “They are doing very well,” he said.
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