Fiscal Policy Pakistan 2r91w

|



á —

= — | < j|

!

— Æ á = " =

Objectives of fiscal policy in Pakistan — self reliance — expansion of exports — containment of import of luxury and non-essential goods — promotion of investment — reduction in income disparity

|iscal Performance during 2007-08 — The total revenue collected during the year 2007-08 stood at Rs 1,499 billion against the budget estimate of Rs.1,476 billion, thus suring the target by Rs.23 billion, mainly on of higher than targeted non tax revenues

|iscal Projections for 2008-09 — The fiscal deficit is projected to decline to 4.2% of GDP in 2008-09 from 7.4% in 2007-08. — The | R is targeted to collect Rs.1360 billion in 2008-09.

# $ % — ©on-interest current expenditure is projected to decline by 1.5 percentage points of GDP — The elimination of oil subsidies by December 2008 and electricity subsidies by June 2009.

î=| — | &

| '

( ) ) * + ) )

" , | — ' * -

)

. ( | / 0 1 +

Ú

— — — — —

á

= =





22 42 32 2 2 22 223526

226524

$+ % *á ð

— < — ð ð —

á



á



°ho collects tax revenues? " |

" |

"

á , 8

, = | - 7 ,

+ ( =

8

+ ( át is an illegal practice where a person, organization or corporation intentionally avoids paying his/her/its true tax liability.

+ ( —

People do not want to disclose their true income

—

Too many unlawful business activities such as drugs, hoarding, black money, etc.

—

©o fear of punishment

—

Complex tax structure

—

Some economic sectors are exempted: Agriculture, real estate and capital gain

— Tax payers see their taxes being used to further rich citizens· interests. — Uncontrolled inflation and high cost of living — Æow level of literacy among taxpayers — Tax pilferage has become the rule, and compliance an exception

°hy Pakistan faces large revenue ² expenditure gap? The principal reason lies in the structural weaknesses of Pakistan·s tax system which is: — Complex — ánefficient — Unfair

Principles of Tax Policy — °idening the tax base — Æowering tax rates — Taxing all value additions including services, not just manufacturing sector — Establish an effective and efficient tax system. — Overcome the culture of tax avoidance and evasion

7

7

7 9 : : : : : : ;

| — á 5

8 / .1 . *1 * '1 ' 1 *

5

*

5

| $+ %

=







~~ ~~

~~ ~

g

g



g



g



g



=





| $+ % ( $ % 8 ( ,( +

7 < 7 ( 0

î 8 | = — +-, — á — =

+ —

— î — < —

î=&>7?