ISLAMABAD: Ansar Javed, chairman of the Federal Board of Revenue (FBR), on Monday informed caretaker Prime Minister Mir Hazar Khan Khoso that the tax machinery will focus on four key areas, including the rationalisation of tax rates and exemptions for improving the stagnant tax-to-GDP ratio in the upcoming budget 2013-14.
“We are preparing the budget 2013-14 with an objective of materialising improvements in the tax-to-GDP ratio in the coming financial year,” Javed told The News after giving an extensive briefing to the prime minister about the upcoming budget.
Tuesday will be the last working day of the FBR chairman but the adviser on finance has forwarded a summary to the prime minister to grant Javed an extension to ensure smooth working till the end of the ongoing financial year.
The tax-to-GDP ratio is expected to decline below nine percent of GDP by the end of June in the wake of massive revenue shortfall to achieve even the revised tax collection target of Rs2,193 billion.
The Federal Board of Revenue chairman outlined four major areas for jacking up tax-to-GDP ratio during the next financial year, which including broadening the tax base, rationalising the tax rates and exemptions, encouraging corporatisation and documentation and simplification of tax procedures / facilitation to stakeholders. On the basis of four guiding principles, the revenue body would strive hard to increase tax-to-GDP ratio in the coming financial year, he said.
When asked about the possibility of materialising the envisaged revised target in the outgoing fiscal year, Javed did not mention any specific figure but said that efforts are underway to maximise tax collection in the remaining weeks of the ongoing financial year.
When asked whether the FBR could touch the revenue collection figure of Rs2,050 billion, he said, the tax machinery would make all-out efforts to maximise revenues.
Tax experts say that it would be quite hard for the Federal Board of Revenue to cross the tax collection figure of Rs2,000 billion till June 30 as so far it has collected Rs1,510 billion in the first 10 months (July-April) period of the current fiscal year.
In the remaining two months (May and June), the FBR will have to collect Rs540 billion to materialise second time revised tax collection target of Rs2,050 billion in 2012-13, they said.
Last year, the Federal Board of Revenue had fixed a tax collection target of Rs2,381 billion, which was revised downward to Rs2,193 billion and now the board is discussing tax collection of Rs2,050 billion till June 30, which also seems a difficult task, keeping in view the existing pace of collection in the first 10 to 12 days of the ongoing month.