FBR upbeat on achieving revenue target for current fy

0
118

National Assembly Standing Committee on Finance was informed on Thursday that the Federal Board of Revenue (FBR) would manage to surpass the revenue collection target of Rs1,952 billion for the current fiscal year. Briefing the committee Chairman FBR Mumtaz Haider Rizvi said the next federal budget would not have any new taxes and there would be no increase in the rate of tax, as new budget would be growth-oriented and focused on simplification of tax systems, cleansing of the statutory regulatory orders (SROs) and phasing out of federal excise duties. He said the budget would focus on the government policy of moving towards three taxes income tax, sales tax and customs duty.
Tax authorities informed the committee that FBR was seriously considering a budget proposal to enhance the rate of withholding tax on the purchase of luxury vehicles. The tax is already applicable on the purchase of new vehicles; however, purchasers were not properly paying withholding tax. The proposal seeks collection of tax at the time of booking of the car.
Chairman FBR said that the tax authorities have been able to maintain growth of 27 per cent in tax collection despite slowdown in the economic activity. Currently FBR is ahead of target and expectations were that by the end of current fiscal year FBR would cross the tax collection target. FBR has provisionally collected Rs131.5 billion during the month of February 2012.
Sharing data of July-January period of the current fiscal year Rizvi said FBR has achieved a growth of 27 per cent and as against the budgeted target of Rs770 billion the actual revenue collection stood at Rs975 billion during first seven months of the current fiscal year. The required growth during February-June period would be 24 per cent. FBR has to collect Rs977 billion in the remaining months of current fiscal. He said the direct taxes collection stood at Rs351 billion during July-January against Rs278 billion in the same period last fiscal, reflecting an increase of 26 per cent. Sales tax collection was Rs445 billion against Rs329 billion, showing an increase of 35 per cent. The withdrawal of zero-rating facility and imposition of sales tax on plant, machinery and equipments and withdrawal of sales tax exemptions through SROs has improved sales tax collection. Another factor responsible for increasing in sales tax collection is the increase in the prices of importable items which also subsequently raised the incidence of sales tax at the import stage.
He said that the collection of federal excise duty (FED) was Rs68 billion during the period under review against Rs68 billion in the corresponding period of last fiscal. The customs duty collection was Rs111 billion during July-January (2011-12) against Rs95 billion in the same period last fiscal, reflecting an increase of 17 per cent.
FBR has been able to collect over Rs41 billion with the help of administrative and enforcement efforts. During July-January FBR has recovered an amount of Rs7 billion from audit of withholding tax agents. The broadening the tax-base has resulted in collection of Rs1 billion. The improvement in collection through proper regulation of the Afghan Transit Trade has improved collection of Rs6 billion. The recovery of Rs1 billion has been made from illegal input tax adjustments. FBR has been able to collect Rs5 billion from income tax surcharge. The improved valuation of imports resulted in collection of Rs3 billion whereas improved appraisement of imports through WEBOC has realized revenue of Rs1 billion. The recovery of arrears has been able to help the tax department to generate an additional amount of Rs9 billion.
FBR is targeting to collect Rs50 billion from the administrative and enforcement actions during February-June period. Out of this amount, the BTB campaign would help in collection of Rs5 billion, recovery of illegal input tax adjustments Rs10 billion, withholding audit Rs22 billion, stuck-up arrears Rs8 billion and additional revenue of Rs5 billion is expected from administrative and enforcement actions on the customs side in the remaining period of current fiscal.