Taxation

‘Size of parallel economy is over 30 percent’

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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