Hafeez hints at new taxes in budget

WB agrees to postpone imposition of 6pc raise in power tariff

WASHINGTON: The World Bank has agreed to postpone the decision of a 6 per cent raise in power tariff following successful negotiations with its representatives, a top government official said.

Addressing a press conference at Pakistan Embassy in Washington, Adviser to the Prime Minister on Finance, Hafeez Shaikh said that there is a likelihood that the International Monetary Fund (IMF) will approve the release of the fourth tranche of $1.3 billion out of $11.3 billion agreed in November 2008 to Pakistan, following its board of directors meeting scheduled to be held on May 14.

Govt to study inflationary impact of VAT: FBR chief

 ISLAMABAD: Government will conduct a study, worth Rs6.0 million, regarding the impact of Value-Added Tax (VAT) on inflation, Federal Board of Revenue (FBR) chairman said on Thursday.

“After the study we will have reliable data about its impact on inflation, revenue and further documentation of the economy,” FBR Chairman Sohail Ahmed told a news briefing convened to erase confusion on VAT.

Although the FBR chairman insisted that VAT would have no inflationary impact, one of his subordinates differed, saying that it would create a price-hike.

Govt likely to replace all taxes on milk with VAT

LAHORE: The federal government is likely to withdraw all the taxes on milk in the forthcoming budget and impose Value Added Tax (VAT) on it, official sources said on Tuesday.

The Federal Board of Revenue (FBR) has been working to end tax regime on milk, dairy products and livestock to help enhance milk and meat productivity, sources said requesting not to be named as they were not authorised to speak with media.

All the taxes would be withdrawn to bring down the prices and VAT would be implemented as sole tax on processed milk, official sources said.

IMF expresses satisfaction over VAT bill

ISLAMABAD: The International Monetary Fund expressed satisfaction over the Value Added Tax legislation in Pakistan, but expressed concern over the rising budget deficit.
           
In a statement, IMF’s Deputy Director, External Relations Department, Gerry Rice expressed hope that the VAT laws would be passed in all four provincial assemblies in Pakistan.

IMF to approve Pakistan tranche in April: official

KARACHI: The International Monetary Fund (IMF) is likely to meet by mid-April to approve the fifth tranche of a loan to Pakistan and a delay was purely for “bureaucratic” reasons, a government official said on Monday.


Pakistan turned to the IMF for an emergency loan package of $7.6 billion in November 2008 to help avert a balance of payments crisis and shore up reserves.

Differences over VAT jeopardises IMF plan

ISLAMABAD: The International Monetary Fund (IMF) and the government have developed differences over the proposed value added tax (VAT), raising fears not only of the fiscal deficit surging during the current and next year but also about the completion of a $11.3 billion standby arrangement programme.
According to sources, the IMF estimates that the VAT will increase the country’s revenue by 0.8 per cent of the GDP next year, but the finance ministry fears that the collection will drop by Rs35-45 billion because tax collection authorities are not fully prepared to take full benefit of the new measures.

Exemption to construction sector may go under VAT

ISLAMABAD: Higher taxation is expected on the steel and construction sector after the implementation of Value Added Tax as all exemptions would be withdrawn under the new regime.
A study paper prepared by the Federal Board of Revenue (FBR) over the success of VAT said there is a special regime for steel sector except for PSM, HMC and Peoples Steel.

VAT draft sent to provinces for consideration

ISLAMABAD: The Federal Board of Revenue (FBR) has sent the draft of the proposed Value Added Tax (VAT) for consideration to the provinces and it would be submitted before the Federal Cabinet for approval by December 31.
 
This was stated by Chairman FBR Sohail Ahmad here Friday, while addressing the business community at the Islamabad Chamber of Commerce and Industry (ICCI).

Industry fears VAT to affect tax collection

KARACHI: The industry fears that introduction of Value Added Tax (VAT) at this stage may disrupt growth in tax collection, and it may even prove counter-productive.

It is being argued that presently economy was not in a position to afford new jitters through experiments.

The industry feels that instead of introducing a new tax law, the scope of existing law be extended to untapped sectors.

Shortfall of Rs30bn in revenue feared

ISLAMABAD: The government is likely to face a revenue shortfall of Rs25 to Rs30 billion during the current fiscal year, mainly due to the additional cost of military operation in South Waziristan.
 
The government is likely to take fiscal measures in January to meet the shortfall, said Federal Board of Revenue chairman Suhail Ahmed on Wednesday.

The new fiscal measures would not affect the common man, the FBR chairman said while talking to newsmen.
The cost of military operation in South Waziristan was not part of the federal budget for 2009-10 announced in June this year, he said.