ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs 852.589 million as tax from 18 public sector industrial units which have been privatized so far.
Total 98 public sector industrial units have been privatized so far including seven automobile units, 15 cement, 13 chemical, seven engineering, six fertilizer, 23 ghee, eight rice, 15 roti plants, and four textile units.
A well placed source at Federal Board of Revenue (FBR) told Customs Today that only 19 public sector industrial units out of total 98 privatized units were functional. Remaining 42 units have not paid single penny as tax while data pertaining to 38 other privatized units is not available with the FBR. An amount of Rs790.881 million was allocated to twenty three ongoing PSDP projects of Ministry of Industries and Production during FY 2015-16.
The source said that privatization since 1991 had been impressive and yields out of transactions completed in the last few years were used to underwrite the losses of these enterprises. These privatized banks are now contributing substantial sums to the national exchequer as they have all become profitable.
The source said that it was realized by the policy makers that stability would remain elusive and short lived if it was not accompanied by structural reforms to remove micro economic distortions and by bringing about improvement in economic governance.
Therefore, FBR embarked on the fiscal policy reforms and consolidation by raising tax revenues, reducing expenditures, cutting down subsidies of all kinds and containing the losses of public enterprises.
The source added that tax reforms were undertaken to widen tax base, remove direct contact between tax payers and tax collectors, introduce value-added tax as the major source of revenue, simplify tax administration and strengthen the capacity of the Central Board of Revenue.
Although these reforms are still underway, yet the adoption of universal self assessment followed by random audit of selected tax returns, automation and reorganization of the tax machinery began to help improve tax collection” the source added saying tax to GDP ratio in Pakistan was lower in comparison to other developing countries and had to be raised in the next five years to reach the average level of comparator countries.
