ISLAMABAD: Minister for Finance and Revenue Shaukat Tarin on Thursday defended the Finance (Supplementary) Bill 2021, saying that tax exemptions worth Rs2 billion would be reviewed under it.
“Whereas our sales tax amounts to around Rs3 trillion. How will the addition of Rs2 billion make a significant difference in inflation?” he questioned while addressing a press conference in Islamabad after presenting the supplementary finance bill in the National Assembly (NA).
Terming the hue and cry over supplementary finance bill as totally unjustified, Tarin said the government had proposed to review tax exemptions of Rs 343 billion in the bill out of which Rs 272 billion taxes were refundable or adjustable, while the rest Rs 71 billion tax exemptions were about luxury items.
“We are not putting extra burden on common man as only Rs 2 billion tax exemptions have been proposed on the items that can be related to the common man which would have a very negligible impact on inflation,” he added.
He went on to say that tax exemptions would mostly be withdrawn on imported items. “A common man usually doesn’t use these items. How will it burden the poor then?” he asked. “We haven’t done anything to burden the poor,” he added.
The finance minister said the main purpose of the supplementary finance bill was not to increase the revenues as the FBR was already ahead of its target of revenue collection, but the main purpose was documentation of various businesses and individuals.
“We have categorically told the businessmen and other professionals that they will not get any refund until they document themselves without their documentation,” he said adding that the approval of this bill would help expanding tax net as more people will start paying their income and sales taxes.
He said the Rs 272 billion tax exemptions on machinery and pharma sector would be refunded to them within seven days of claims or these taxes would adjusted against any other payable income or sales taxes.
He said a major portion of the rest Rs 71 billion tax exemptions were proposed on luxury imported items such as high-end bakery, fish, chocolates, and others.
On the SBP Amendment Bill 2021, the finance minister said it was aimed at strengthening the central bank. “And strengthening institutions is in the PTI’s manifesto,” he added.
Tarin said under the bill, the SBP would be given administrative independence, which would give it the authority to decide matters such as the salaries of the bank’s employees.
Moreover, he said, members for the SBP board, which would have the authority of the central bank, would be nominated and approved by the government. “The president will approve them,” he said, adding that the board would also be answerable to relevant standing committees of parliament.
