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Taxation
Chairman Federal Board of Revenue (FBR) Shabbar Zaidi said on Friday that size of the parallel economy is over 30 percent, which needs to be brought into the formal regime. Talking to reporters at Ministry of Finance, he said that nobody could exactly estimate the size of the parallel economy. “Some say that the size of the parallel economy is 30 percent or 40 percent; however, in my personal view, the size of the parallel economy is over 30 percent.”

About the amnesty scheme, he said that it would be the decision of the Prime Minister and finance minister about the date for launching of the amnesty scheme. When asked about meetings with the IMF team, he said, “I have explained IMF about the Pakistan’s tax system.”

To a question on withdrawal of Rs 700 billion tax exemptions, he said, “We will do what is better for the people of Pakistan. The government will not take any decision which is not better for the people of the country. The Prime Minister and Parliament will approve budget proposals to be finalised.” To a question, he said the FBR has not given any amnesty to real estate sector to legalise money/assets on payment of one percent tax.

He added that the existing taxpayers would be given due respect and those who are not in the tax system would be brought into the tax system. When asked about the reforms, he said that the word reform has been over used. “It is our intention and compulsion to bring undocumented economy into the formal economy. When the undocumented economy would come into the documented regime, the tax base would automatically be expanded.”
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Taxation
The Lebanese government agreed on Friday to raise the tax on interest payments to 10% from 7% for three years as part of the draft 2019 budget, the information minister said. Finance Minister Ali Hassan Khalil has described raising the tax as “fundamental” to bringing down heavily-indebted Lebanon’s budget deficit.

“It was a very long session, but it was very productive in terms of outstanding matters, most of which were decided, namely raising the tax on interest for banks and individuals from 7% to 10% for a period of three years,” Information Minister Jamal Jarrah said in a statement. “After this period, the tax will return to 7% and our financial and economic situation has improved, and if there is a further improvement, we could lower it from 7% to perhaps 5%,” he added.

The chairman of the Lebanese banking association recently warned any increase in the tax on interest payments would affect capital flows to Lebanon, weaken banks’ ability to play their financing role in the economy, and obstruct growth. Interest income had been tax-free until the government introduced the 7 percent levy last year.

The draft budget under discussion by Prime Minister Saad al-Hariri’s government aims to bring down the deficit to less than 9 percent of GDP in 2019 from 11.2 percent in 2018, the finance minister has said. Proposals in the draft budget to reduce the public sector wage bill led to protests and strikes by state workers this week.
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Taxation
Punjab Finance Minister Hashim Jawan Bakht presided over a meeting of resource mobilization committee here on Friday and discussed different proposals to enhance the provincial resources. On the occasion, the Minister said that taxation is a gateway to development and the goal of economics self-reliance can be achieved by promoting tax culture. He said national resources will be spent on public welfare and the promotion of health and education sectors, adding that funds will also be utilized to improve the standard of basic facilities by enhancing the resources.

“The PTI government considers national resources as a public trust and increase in resources is the need of the time so that improvements could be brought through development schemes,” he added. Provincial ministers Malik Muhammad Anwar, Muhammad Jahanzeb Khan Khichi, Hafiz Mumtaz Ahmed, Chief Secretary, SMBR, secretaries of finance, excise and taxation, transport, housing departments, PRA officials and others attended the meeting.
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