Pre-Budget Economic Analysis Campaign
12:00 am to 1:00 pm
Recommendations taken by Government of Pakistan
During Pre-Budget analysis campaign number of proposals were put forward to the previous government who presented budget in April 2018. Number of recommendations which came forward from the discussions organized and managed by CIPE and SDPI were accepted and taken up by the government at that time. Some of the worth mentioning in this regard are:
- Some of the accepted proposals from last year have been continued by the federal government which include custom duty exemption on harvesters and removal of GST on imported sunflower and canola seeds.
- We recommended reduction of the indirect tax burden on agriculture sector. The government has reduced the GST on fertilizers to 2% and GST on machinery from 7% to 5%.
- Government has introduced zero-rating regime in 5 sectors namely textile, leather, sports goods, surgical goods and carpets.
- The government has promised to refund pending refund claims of exporters over the next 12 months and afterwards all claims will be paid back on monthly basis as stipulated by law.
- Government has accepted our proposal of risk-based audits and in this regard, the grant of stay by the Commissioner (Appeals) was subject to payment of 25% of tax liability. The condition has now been relaxed to 10% of the tax liability. The authority of commissioners and chief commissioners to appoint staff at premises of the tax payer to monitor sales and production has been withdrawn due to complaints of misuse.
- Regarding the real estate sector, the FBR rates have been abolished and the transaction will be recorded on basis of value declared by the buyer and seller.
- The government has decided to reduce the corporate tax rate standing at 30% now to 25% in the next 5 years.
- Several measures on reduction of customs duty and indirect taxes have been taken.
CIPE and SDPI have done considerable public-private consultations in the last two years. As a result of these consultations, both parties came up with a draft economic agenda for 2018 elections. The core-objective of this activity was to fully support the vision of economic reforms to four-tier consultation model by engaging public office holders, private sector leaders, academia, and the political representatives from all mainstream political parties. Objectives of this activity revolved around economic reforms for reducing cost of doing business in Pakistan and improving ease of doing business index.
Project link: https://sdpi.org/research_programme/researchproject-388-26-60.html