Prime Minister Shahid Khaqan Abbasi has hinted at announcing a one-time tax amnesty scheme aimed at bringing back foreign assets of Pakistanis from abroad. Speaking at Pakistan Economic Forum (PEF) organized by Pakistan Business Council here on Wednesday, the Prime Minister also shared his plan to broaden the dismally narrow tax base of the country, stating that lowering tax rates for individuals, bringing the wealthy into tax net and dealing with the tax evasion through use of technology are the salient features of his plan to broaden the tax net.

The Prime Minister stated that the government will bring one-time tax amnesty scheme and deal with the tax evasion issue with the help of NADRA. Abbasi stated that it is priority of his government to broaden the tax base by bringing potential individuals into the tax net.

The Prime Minister was of the view that higher corporate tax rates will also be brought down. He regretted that number of 1.2 million filers as well as contribution by individuals in the total revenue collection is very low. The Prime Minister claimed that out of total Rs 4 trillion revenue collected by Federal Board of Revenue (FBR), the tax paid by individuals was only Rs 200 billion.

The Prime Minister emphasized the need for some remedial measures to lower tax slabs for individuals and corporate taxpayers and increase minimum limit to broaden the tax base. He was of the view that decline in revenue collection on account of slash in tax rates will be offset by bringing the potential individuals into tax net.

The Prime Minister recounted that his party’s manifesto of 2013 elections was to improve law and order, overcome energy crisis and turn around the economy. Four-and-a-half-year down the road, Abbasi stated the law and order has improved significantly. The government has not only been able to almost overcome the energy crisis but has also initiated projects to cater for future demands. He assured that there will be sufficient power by 2030.

The Prime Minister stated that there is a challenge of dealing with the system inefficiencies creating circular debt. He stated that system inefficiencies and circular debt are source of concern for the government. The Prime Minister stated that lower exports are of grave concern for the government as it wants the country’s exports of $20 billion to be doubled. Abbasi stated that Pakistan’s exports need to be more competitive to grab their share in the global market. He said the government can facilitate the exporters and manufacturers to achieve the desired results. The Prime Minister stated that China-Pakistan Economic Corridor (CPEC) is a big opportunity for the country and there is need to identify benefits for Pakistan.

Speaking on the occasion, former Governor State Bank of Pakistan Dr Ishrat Hussain suggested the government to ensure continuity of export package to increase exports and follow the Indonesian model of amnesty scheme for bringing back foreign assets from abroad. He stated that Indonesia was able to bring back $20-40 billion by offering amnesty scheme. He also pointed out discrepancies in foreign direct investment (FDI) numbers reported by the SBP and machinery imports of Chinese projects. He stated that discrepancy in numbers increased from $2 billion to $4 billion. Hussain said that he also suggested the government that Pakistan Remittance Initiative (PRI) has been done and now other ways should be explored to channel the money through banking system.

Published in Business Recorder