The IMF wants to eliminate the loopholes in the tax system: president of the FBR


Federal Bureau of Revenue (FBR) chairman Dr Muhammad Ashfaq at a press conference in Karachi on December 31, 2021. – YouTube
  • The chairman of the FBR said that the IMF has always demanded a better tax system.
  • Said that issues related to taxes, the IMF have been “distorted in media reports”.
  • The tax exemption on basic necessities remains intact, he adds.

ISLAMABAD: Federal Revenue Bureau (FBR) chairman Dr Muhammad Ashfaq said on Friday that the International Monetary Fund (IMF) had always wanted to “close the loopholes” in the Pakistani tax system.

“The IMF has always demanded that the tax system be corrected,” the chairman of the RBF said at a press conference a day after the government unveiled the 2021 (additional) finance bill and the draft. SBP 2021 amending law – preconditions to take back the $ 6. billion dollars IMF External Financing Facility (EFF).

The FBR chairman said several tax and IMF issues were “distorted in media reports.” He said the IMF was a “reality”, adding that many taxes allegedly levied “were not actually imposed by the government.”

Dr Ashfaq noted that tax policy reforms were long needed. However, during previous regimes, rulers changed laws to achieve their personal interests and benefit from exemptions.

He said that every time the country embarked on an IMF program, new taxes were imposed but the old exemptions, affecting certain economic groups, were not addressed and remained entrenched in the system.

“The exemptions were not withdrawn simply because it would have been a very unpopular politically decision,” lamented the president of the FBR.

The chairman of the tax administration said that the RBF had always kept the tax exemption on basic consumables intact. “The tax exemption on imports of mobiles and motorcycles has been lifted,” he added.

The tax exemption on magazines, fashion journals, imported live animals, steak meat, fish, cottonseed, corn seeds and poultry feed has also been lifted, he said. said, adding that the tax burden on an ordinary person had “only increased by 2 billion rupees”. .

Proposed taxes on items

According to the proposal of the Ministry of Finance, the government will impose a tax on around 150 goods at the rate of 17%. As a result, goods that were currently either completely exempt from General Sales Tax (GST) or taxed at 5-12% would now be taxed at 17%.

If the revisions proposed by the government go through:

  • The income tax rate on mobile phone calls will be reduced from 10% to 15%.
  • Imported meat and poultry products will be exempt from tax.
  • The GST on cars over 1000 cm3 will be reduced to 17% and the tax on the importation of electric vehicles under CBU conditions will be reduced from 5% to 17%.
  • The zero rate available on supplies of raw materials for imported milk would be abolished and taxed at 17%.
  • Duty-free shops will be taxed at 17%.
  • Bread prepared in bakeries, restaurants, food chains and shops will be taxed at the rate of 17%.
  • The sales tax on prepared foods and sweets provided by restaurants, bakeries and confectionery will increase to 17%.
  • Goods received as a gift from a government or foreign organization will be taxed at 17%.
  • Cottonseeds will be taxed at 17% GST.
  • The machinery tax for the poultry sector will be reduced from 7% to 17%.
  • The GST on silver and gold will drop from 1% to 17%.
  • Computers and laptops will also be taxed.
  • Medicines raw materials will be taxed at 17% GST.


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