With crucial meetings of the National Economic Council (NEC) and the federal cabinet lined up for the next few days, the government on Sunday firmed up budget proposals, including targets for taxation measures, for 2019-20.
Sources said a meeting presided over by Prime Minister’s Adviser on Finance and Revenue Dr Abdul Hafeez Shaikh discussed various proposals that could create a revenue cushion of about Rs1.45 trillion in the next fiscal year, taking the year’s revenue target to Rs5.55tr from a dismal Rs4.2tr.
There was a general agreement that over Rs700 billion in additional revenue has to come from two areas — sales tax and income tax. The meeting also discussed some proposals for increasing general sales tax by 1 per cent or 1.5pc to yield over Rs350bn.
FBR chief says Rs220bn could be generated through better enforcement measures and another Rs200bn through withdrawal of tax exemptions
A member of the Federal Board of Revenue (FBR) underlined the need for reverting to an income tax regime in force before Miftah Ismail’s tenure as finance minister, by reducing exemption levels on income tax and increasing tax rates. (The PML-N’s finance minister had increased income tax exemption to Rs1.2 million from Rs0.4m and drastically reduced rates for all other incomes).
