Finance Minister Ishaq Dar on Tuesday chaired an important meeting of the tax mandarins to finalise additional revenue measures that the government plans to impose through a mini budget from December 1, an official source said.
The meeting was attended by newly-appointed FBR Chairman Nisar Mohammad and other senior officials to discuss future roadmap for increasing revenue collection. The meeting also discussed on the strategy to meet the targets set for the current fiscal year.
The government is expected to increase duties and taxes on 350 products to meet the revenue shortfall that increased to Rs 40 billion during the first quarter of the current fiscal year. The government plans to take additional revenue measures to meet the fiscal deficit limit as well as to continue with the IMF programme.
The new tax administration wants to change the revenue strategy, the source said, adding they want to nab the non-filers, push the low filers and hold the corrupt accountable in the system. This requires giving some relaxation to tax men to exercise their legal powers for tax collection.
“However, the government wants them to adopt the old approach. Let the people file their returns on their own assessment. The number of tax filers should be increased as demanded by the IMF and the rest of the issues would be dealt with after increasing the tax base increases,” the source said.
It is important to mention that the government had set an ambitious target of generating Rs 3.1 trillion in tax collection during the current fiscal year even though the economic activity has failed to take off during the last two years.
Instead on increasing the tax compliance and clawing the tax evaders, the FBR reverted to its old trick of increasing the GST on each and everything. The most innovative being the imposition of withholding tax on cash withdrawal from banks. This type of gimmickry back fired and resulted in change of previous FBR management.
A statement issued by the finance ministry said that the FBR had achieved 33 percent revenue growth in the last two years with dedication and concerted efforts and the number of tax payers had risen from 7,00,000 to one million which was highly creditable.
The FBR chairman shared the detail of various revenue measures and assured that his team would put in its best to realise the targets for the current fiscal year. He said the FBR was taking due cognizance of the recommendations put forth by the tax reforms commission to enhance revenue and improve tax payers facilitation.