Dar further stated that in order to reduce the budgeted revenue shortfall of Rs 196 billion the government imposed additional taxes to generate Rs 46 billion. He said the government has reduced revenue collection target by Rs 119 billion - from Rs 2810 billion to Rs 2691 billion for the current fiscal year. "We calculated a Rs 165 billion revenue shortfall including litigation with respect to Rs 31 billion Gas Infrastructure Development Cess (GIDC). We will pursue this case vigorously. We collect 20% of total government revenue from petroleum products while federal government allocates 57 % to provinces from the divisible pool."
The minister said the government suffered a revenue loss of Rs 80 billion due to global oil price decline and the government recovered the loss, albeit partially, by imposing a 10% General Sales Tax (GST) on petroleum products which is projected to generate Rs 28 billion. Dar added that a 5 percent regulatory duty on furnace oil would generate Rs 5 billion from February to 30 June 2015 and an additional Rs 3 billion would be generated through the imposition of a tax on cosmetics, metals, aluminium etc.
The Finance Minister claimed that the government provided relief to people by reducing the price of petroleum products by 37.68% since 31 August, 2014 and added that petrol is available in Pakistan at the lowest price in the entire South Asia. Dar revealed that total tax collection during the first six months of the current year was Rs 1172 billion compared to Rs 1031 billion in the comparable period of the previous fiscal year - a 13% increase.
The Finance Minister said there will be no National Tax Number (NTN) for individual tax filers from 1st of July this year but computerised National Identity Card (CNIC) numbers will be used and only companies will be issued NTN numbers. The minister said an increase in GST on petroleum products and changes in other taxes were imperative to meet various needs, including the release of funds to provinces from divisible pool. He said we cannot ignore expenditures in the wake of the Zarb-e-Azb operation, debt servicing and payment of salaries.
The minister said that Pakistan is facing three big challenges: economy, energy and extremism. Syed Naveed Qamar of Pakistan People's Party (PPP) claimed that the government has no respect for sovereignty of Parliament as it is imposing taxes without taking it into confidence. He urged the government to ensure a trickle-down of reduction in oil prices to the people. He rejected all the increases in taxes by the government and demanded their immediate withdrawal.
Rashid Godil of MQM said there is a need to improve tax collection system instead of imposing more taxes. He said that GST and regulatory duties are regressive taxes and there are other ways to collect taxes to reduce the shortfall. He said the government should consult with all political parties and take measures to provide relief to the poor.
Sahibzada Tariqullah of Jamaat-i-Islami (JI) said the government should withdraw the recent increase in taxes and duties. Shaikh Rashid Ahmad said that a reduction in oil prices in the international market is a blessing and its benefits should be passed on to the common man. He said that according to media reports, Rs 124 billion worth of oil was stolen while vehicles were given to the OGDCL officers at a cost of Rs 1000 each. He said the government should provide details to the House about the agreement on the LNG import from Qatar.
Leader of the Opposition Syed Khursheed Ahmad Shah said that at the very least the government should withdraw 5% regularly duty on furnace oil and 5% increase in GST on petroleum products. "We will stage a walkout from the House if the government does not pay attention to our demands," he added. The Speaker adjourned the House after the walkout of the opposition from the House in the absence of a response from the Finance Minister.