Businessmen hail FBR for 15% growth in revenue collection target – Daily Times

Businessmen hail FBR for 15% growth in revenue collection target – Daily Times

Businessmen hail FBR for 15% growth in revenue collection target – Daily Times

The Friends of Economic and Business Reforms (FEBR) on Sunday hailed the efforts of the Federal Board of Revenue (FBR) for achieving 90% revenue collection target set for first two months of Fiscal Year 2019-20 while break down in taxes show above 15% growth in collection of inland sales and income tax.

FEBR President Kashif Anwar appreciated the positive results, however, added the shortfall in tax collection has also widened to Rs 70 billion despite a decent growth of 15%, which reflects ground realities, indicating that target is three times lower than what the government needs to meet the annual revenue target.

The results for July-August 2019 once again indicate that the Rs 5.503 trillion target is unrealistic, which has to be revised downwards, he suggested.

Regarding collection in July, the FEBR President said that with impressive growth in revenue collection on domestic front, the FBR had collected Rs 277 billion in the first month of July 2019 against Rs 251 billion, indicating that the Board collected Rs 26 billion more in the first month of the current fiscal year compared to the last year despite 8-10 non-working days on account of Eid Al Azha in this period.

The positive aspects for the two months of FY2019-20 are that imports during the two months decreased by $1 billion, he said, adding, the positive effect is taken into account, collection during the past two months is in line with the target.

From July through August the FBR received Rs 574 billion in taxes against the target of Rs 643.7 billion. Overall, the collection in first two months was higher by Rs 70 billion or 15% when compared with Rs 498 billion collected in the same period of previous year.

The FBR received a hit of Rs 60 billion in August alone as it could collect only Rs 292 billion against the monthly target of Rs 352.2 billion. Though this collection in August was up by 18% compared with receipt of Rs 247.4 billion in August last year yet the government’s drive to broaden the tax base is not yielding desired results. Although the number of tax return filers has jumped from 1.8 million to 2.6 million, the actual tax contribution by these additional 800,000 filers is just Rs 2.4 billion and including Rs 1.5 billion contributed by the companies.

Kashif Anwar found fault in the tax machinery which is not effectively utilized to collect maximum revenues, seeking a new action plan from field formations to increase income tax collection. He said that the entire income tax force is collecting only 7 percent of the total income tax and the rest is being generated automatically.

Kashif Anwar called for legislations to safeguard the rights of existing taxpayers, asking the economic team of the government to respect existing taxpayers and safeguard their rights by legislation against the misuse of discretionary powers by the FBR. He suggested the government to create harmonization between Sales Tax & Income Tax laws by removing those provisions which conflict with each other. He suggested to department to enhance tax base by automation and integration of revenue departments with other public entities.

The Friends of Economic and Business Reforms (FEBR) President urged the government to formulate a special scheme for retailers to bring them into tax net so that tax base should be enhanced. He said if law makers are serious in broadening the tax base, they have to restructure the Sales Tax and Income Tax, making taxpayers-friendly policies, redrafting those sections which have empowered limitless authorities to them, undermining the rights of taxpayers and refrain non-filers from becoming part of formal economy.

He proposed that it should be mandatory for all retailers to make verifiable purchases and feed them in their annual income tax return. Otherwise, their returns should not be acceptable.

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