LAHORE: The government has imposed Rs40 billion new taxes on imported luxury items to generate additional revenue so that provinces can get their exact share from the federal divisible pool, said Finance Minister Ishaq Dar on Wednesday.
Speaking to tax officers at the Federal Board of Revenue (FBR), the minister said that new taxes would not only help overcome budgetary deficit, but would also provide finances for development schemes.
He said that tax collection target was a big challenge, but “we will manage to achieve it.”
He said Pakistan’s total exports currently were 10 per cent of the GDP which should be around 15pc.
“When we took over two-and-half years ago, budget deficit was 8.8pc which has reduced to 5.37pc. We are hopeful to further trim this deficit to 4.3pc in the current fiscal year,” Dar said.
He said that Pakistan’s growth rate has increased due to better tax collection.
“Annual tax collection growth currently is 16.5pc and now various credit rating agencies are declaring Pakistan as second attractive destination in the world for foreign investment,” he said.
Dar further said that to improve the economic management, PML-N government had deducted 30pc from non-development budget and discarded prime minister’s budget for block allocations worth Rs42bn.
About fresh loans from the International Monetary Fund, Dar said the government was securing new loans to repay the existing ones as “we have to look for Pakistan’s interest first.”
He said that the foreign exchange reserves are likely to reach $21 billion soon.
He said currently electricity shortfall was around 5,000MW which would further reduce as government was currently establishing 10,000MW new projects which would face completion by March 2018.
“Currently Pakistan is in dire need of better growth rate with new employment opportunities. Our target is to increase the GDP growth rate up to 7pc. Without achieving this target, it will be tough to achieve the desired goals,” Dar added.
He said the government had given Rs45bn to army for Zarb-i-Azb operation and spent Rs8bn on rehabilitation of flood-affected victims, adding the government also paid Rs1.5bn for earthquake victims.