| GEO Business|
| Federation hints at increase in tax ratio|
| Updated at: 0308 PST, Tuesday, January 12, 2010|
ISLAMABAD: Minister for Finance, Shaukat Tarin said on Monday that Pakistan is expected to get US $ 1.8 billion by June this year, adding that the current rate of 9 percent Tax to GDP ratio may be increased if government failed to accomplish Tax target by the end of last quarter in 2010.
“We are gradually and slowly receiving pledges and commitments from Friends of Democratic Pakistan and by June 2010 we will get US $ 1.8 billion”, he said addressing a press conference here at Ministry of Finance this evening.
During the conference the Minister also launched National Saving Bonds (NSB) to promote public savings through debt market and to benefit investors and generate revenue for the country’s development.
He expressed the hope that government’s initiative would also help contain inflation and provide a safe and easy way to save peoples money with the upside potential of capital gains and making a solid addition to investors investments portfolio.
He said when people choose to invest in NSB, their money potentially grows and best of all it stays safe in future.
Highlighting salient features of NSB, the Minister said that opening of the subscription of the bonds will be started from January 11, and close on January 25.
He said the date of trading of NSB subscription would start from February 25.
Shaukat Tarin said that investment in the bonds can be made with minimum of Rs.20,000 and in multiple of Rs.10,000 without any maximum limit.
He added that bonds shall be available for three,five and ten years maturities and can easily be subscribed for bonds through nationwide network of National Saving Centers.
Shaukat Tarin said that National Savings Bonds offer competitive rates that compare favourably with other forms of savings and profit on NSB shall be paid semi-annually.
Highlighting the Coupon rates of NSB, he said that 03 years bond will get a profit of 12.50 percent per annum,05 years 12.55 percent per annum and for the 10 years bond will get 12.60 per annum.
The Minister said that NBSs would be listed on the Stock Exchanges of Karachi (KSE), Lahore (LSE) and Islamabad (ISE) which would act as provider of liquidity for NSBs during the life of the instrument by facilitating secondary market trades.
He added that investing in NSBs is simple and easy and the investment can be made through subscription and will be registered under investors title with CDC and listed on all three stock exchanges.
Shaukat Tarin said that intending investors having Central Depository Company (CDC) accounts /sub accounts may visit the designated Central Directorate of National Saving Centers (CDNS) for investment in National Saving Bonds (NSB).
Shaukat Tarin said that debt to GDP would rise its peak upto 57 percent and then it will come down during the current financial year.
However, he said that government’s borrowings are within the limits of Fiscal responsibility and Debt Limitation Law.
The size of GDP would try to be expended in real terms by enhancing the productivity of agricultural, manufacturing sectors and to increasing the people’s income, he added.
He also called for increasing the current rate of 9 percent Tax to GDP ratio, and also controlling the bleeding of national resources, more market access and adopting the austerity measures to further strengthen the national economy.
Shaukat Tarin said that national expenditure has increased due to on going war on terror adding that government was fully determined to achieve the set revenue targets of Rs.1380 billion for fulfilling these expenditures.
“During the last two months (November, December), revenue targets had surpassed which was a positive omen for national economy”, he added.
The minister said that Austerity committee is likely to present its reports during the next week for implementing the long, medium and short-term measures for the benefit of the country.