The Federal Board of Revenue (FBR) Tuesday proposed for phasing out of all the tax exemptions within three years as the total exemptions have reached Rs 480 billion.
FBR Chairman Tariq Bajwa while briefing the Senate Standing Committee on finance, revenue, economic affairs, statistics and privatization said that this step would help enhance over all tax collection.
He proposed the withdrawal of 0.9 percent to 1 percent of GDP from the tax exemption during the next budget which would help for materialising additional Rs 240 billion of revenue collection in the country.
The FBR chairman apprised the committee chaired by Senator Nasreen Jalil that several steps had been taken to increase revenue collection in the country and about 90,000 notices were issued to potential tax payers for bringing them under the tax net.
He said efforts were under way for preparing an actionable data for potential tax payers in collaboration with National Registration and Database Authority (NADRA) adding that the FBR had started work with the provincial governments to collect data of land transactions during the current financial year. We are also collecting data of high paid tuition fees, people who frequently traveled abroad but did not contribute in tax and other potential tax payers to bring them under tax net for further improving the revenue collection, he added.
Tariq Bajwa said out of the total notices served so far, about 86,000 people were brought under tax net. Notice serving ratio was increased by 50 percent where as the rate of voluntary compliance rate has also seen significant increase which would be gradually increased.
The FBR head told the meeting that about 12,000 people who were served the notices did not comply with the notices would be dealt with the rules and regulations. He informed the meeting that about 90 million national identity cards were issued whereas 850,000 people in the country have the national tax number.
The Senate committee was also informed that about 711,000 people had deposited their tax during last financial year adding that tax collection during last three quarters posted increase as compared to the same period of last year.
The meeting was also informed that no individual SROs were issued during the current financial year adding that 56 SROs were issued during the last financial year. The meeting was also informed that a proper mechanism was on place to monitor the Afghan Transit Trade which stood at Rs 127 billion.
Speaking on the occasion, Senator Saleem H Mandviwalla asked the FBR to come up with innovative ideas for raising tax collection. He claimed that unofficial economy in the country was larger than the official economy.
Senator Kalsoom Parveen asked for bringing the tax evaders under tax net instead of imposing tax on already tax payers.
The committee also formed a sub-committee comprising Senator Saleem H Mandviwalla and Syeda Sughra Imam for looking into the exemption in high paid fee and submit its report after deliberations.
Senators, Ilyas Ahmad Bilour, Osman Saifullah Khan, Syeda Sughra Imam, Saleem H. Mandviwalla and Muhammad Hamayun Khan Mandokhel attended the meeting.
