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New
NFC award to be announced in 2010-11
* Finance
secretary hints at imposing taxes on real estate, services sectors
* Says required power tariff increase estimated at 17%
By Sajid Chaudhry
ISLAMABAD: Finance Secretary Salman Siddique said on Tuesday a new
National Finance Commission (NFC) award would be finalised by the
first half of the 2010-11 fiscal year – between July and December in
2010.
Siddique told the National Assembly (NA) Standing Committee on
Finance and Revenue that to facilitate all four provinces in
reaching an agreement, the new NFC Award would be based on the
mechanisms of divisible pool and subvention. Revenue distribution by
subvention would be carried out on the basis of population,
backwardness, fiscal efforts and development needs of the provinces,
he added.
He told the committee that the budget for the 2009-10 fiscal year
would, however, be prepared under an interim NFC award – in force
for the past few years.
The NA body was briefed on the tax collection situation in the
ongoing fiscal year as well as issues faced by the economy due to
the global credit crunch.
New tax: Siddique hinted at imposing a capital gains tax on the real
estate sector and a 4.5 percent tax on services in the forthcoming
2009-10 budget, under an agreement with the provincial governments.
The tax collection target for the next fiscal year is being fixed at
Rs 1.405 trillion, he said.
The finance secretary said these revenue measures are being
considered to broaden the tax base.
A revenue potential of Rs 300 billion exists in taxing services and
the federal government has already begun negotiating a process with
the provincial governments, Siddique said. He said the services
sector – which accounts for 53 percent of the gross domestic product
and is contributing negligibly in terms of taxes – would be taxed
under an agreement with the provinces, with enforcement and
collection responsibilities to be transferred to provincial
authorities when they are able to manage it in the next 5 to 7
years.
Power tariff: The finance secretary told the committee that the
current required power tariff increase, to be passed on to
customers, had been estimated at 17 percent.
The finance secretary said all commercial concerns of the military
were being taxed under the normal regime, adding that establishments
managing production exclusively for the armed forces were, however,
exempt from taxes.
Daily Times: Wednesday, May 27, 2009 |
