Prime Minister Muhammad Shehbaz Sharif Saturday said that the positive trends due to tariff reforms and the government’s steps to modernize and improve the Federal Board of Revenue (FBR) transparently were solid evidence of the correctness of the measures.
He was chairing the weekly review meeting on reforms in the country’s tax system.
“The latest economic statistics are proving the government’s economic reforms are working, as a result of which the pace of economic growth is improving every day, evidence of which is also coming before the business community and the nation,” he added.
During the meeting, it was briefed that the tariff reforms carried out this year have not had any negative impact on revenue collection, rather, the collection of duties and taxes at the import level has increased by 25 percent.
This increase came despite a mere 3.6% increase in the volume of dutiable products, which also disproved fears that reducing tariffs would reduce revenue collection.
The participants were told that duty-free imports increased by 41.5%, which means that a large increase in imports has occurred in products that fall under the category of raw materials and intermediate goods. This can be considered a sign of significant improvement in the impact on productivity at the basic level.
The meeting was told that the ongoing economic reforms, including tariff reduction and improvement of the tax system were aimed at increasing manufacturing and exports, thereby making the environment more conducive for investment in the country.
The increase in imports of goods falling under the category of duty-free imports is a sign of the effectiveness of the government’s tariff rationalization measures, which are aimed at increasing the import of raw materials and secondary goods.
It was informed that the aim of tariff reforms was to reduce the cost of raw materials used in the manufacturing sector so that the volume of domestic exports could increase and competitiveness in the global market could be achieved. Latest data proves that this policy of the government has been successful. The results achieved from customs reforms also include the effects of the successful government strategy of making the FBR a modern, transparent and viable institution.
The prime minister directed to take administrative and institutional measures to prevent tax evasion and eliminate the shortcomings in the tax collection system in tobacco, tiles and other major sectors in a phased and effective manner.
He congratulated the entire finance team including the FBR and stressed that the pace of effective implementation of the reform process should be further accelerated so that Pakistan can get out of the vortex of economic difficulties and be able to truly meet the sustainable development goals.
Federal Minister for Finance Muhammad Aurangzeb, Federal Minister for Climate Change Dr. Musadik Malik, Federal Minister for Petroleum Ali Pervaiz Malik, Minister of State for Finance Azhar Bilal Kayani, chief secretaries of all provinces, Chairman FBR and other relevant government officials attended the meeting.