ISLAMABAD: Finance Minister Dr Abdul Hafeez Shaikh on Tuesday presented the Income Tax (Amendment) Bill, 2021, in the Upper House of the Parliament after necessary approval from the federal cabinet.
According to sources, the government has proposed a number of reforms in corporate income tax, including the streamlining of nonprofit organisations (NPOs). Around 15 income tax provisions pertaining to NPOs had expired and the government’s main purpose is to make laws pertaining to NPOs simpler, they added.
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Similarly, measures pertaining to the government’s borrowing powers from foreign multilateral organisations and countries have also been proposed in the bill. In addition, the government has proposed to give exemptions to those realtors who would complete their low-cost housing projects before June 2024.
Meanwhile, if owners of hydropower IPPs sign an agreement with the government before June 2021, than the government would offer exemptions to them. Likewise, exemptions would also be offered to those oil refineries that would sign an agreement with the government before June 2021.
Overall, the government has proposed 80 amendments, mostly related to withdrawal of exemptions, in the Income Tax (Amendment) Bill, 2021, sources said. As per the IMF, the total quantum of these measures would be Rs140 billion, while independent experts believe it to be around Rs30 billion.
Later in the day, the government’s economic team, under the leadership of the federal minister, informed media that the federal cabinet has approved three important laws pertaining to the strengthening of the economy as well as departments.
Addressing a press conference, the finance minister said that the government has introduced an Income Tax (Amendment) Bill, 2021, in Senate and “we are going to withdraw some tax exemptions to the corporate sector” to collect more revenue.
“Previous governments had given exemptions to different sectors, especially the cooperate sector, and we will remove or minimise these exemptions,” he stated. “Basically, the government is working on a policy to ensure uniform taxes across all sectors,” he added.
The finance minister further informed that cabinet has given an approval to make State Bank of Pakistan autonomous. “The SBP governor will be answerable to the parliament, while institutions can also hold the central bank chief accountable.”
Sharing more points on SBP’s autonomy, the finance minister said that the tenure of the SBP governor would be extended to five years, adding that the central bank would now be able to make decisions pertaining to monetary policy as well as an exchange rate in an independent way.
He also shared that the government would abolish the monetary and fiscal policy board, and would not take loans from SBP.
“We will give targeted subsidies and will make a solid basis of economy in coming days,” he maintained.
Speaking to the occasion, Adviser to PM on Institutional reforms Dr Isharat Hussain said that the government would sign a performance agreement with 441 state-owned organisations to streamline their functions.
“We have appointed CEOs in 56 departments through a transparent process and I assure you the government will appoint competent persons in the remaining departments as well,” he added.
The adviser informed that presently, 51 organisations out of 85 commercial institutions are in profit, adding that the privatisation process of 44 organisations would be completed soon.
Moreover, Industry and Production Minister Hammad Azhar said that the PM has directed to continue subsidy on five essential commodities through Utility Stores Corporation. He said this year’s Ramazan Package would be approved in tomorrow’s ECC meeting.
