ISLAMABAD: The Federal Cabinet has reportedly approved ‘mini budgets’ to be introduced in the months to come under the rubric of additional revenue and administrative measures, reveal official documents exclusively made available to Business Recorder.
These documents titled revised estimates 2011-12 and budget estimates 2012-13 were tabled before the Federal Cabinet on June 1, 2012.
“Total revenue is estimated at 14.3 per cent of GDP for 2012-13. With regard to FBR tax revenue, the government in medium term will continue introducing additional revenue and administrative measures led by rationalisation of taxation system,” the documents added.
The Cabinet has been assured by Finance Minister Dr Abdul Hafeez Shaikh, who failed to deliver his entire budget speech in the National Assembly due to uproar by the PML-(N) legislators, that the government will continue mobilization of domestic resources through tax policy and administrative reforms by broadening tax base, simplifying tax rules, making tax procedures transparent and elimination of discriminatory tax exemptions.
Furthermore, tax deepening measures will be deployed reducing the tax gaps between taxable income and taxed income.
The Finance Minister further stated that tax administration reforms were essential to eliminating governance issues in resource mobilization, reducing tax slippages and enforcing compliance.
According to the Finance Minister, tax to GDP ratio is expected to increase from existing 10.1 per cent to 11.6 per cent during the next three years.
Provinces will be encouraged to broaden the tax base.
This is considered important given that 57.5 per cent of net divisible pool goes for meeting the financing requirements of provinces and special areas.