ISLAMABAD: The Federal Board of Revenue (FBR) has estimated that the installation of Point of Sale (PoS) machines at tier-1 retailers (big shopping malls, chain of stores) chain would require Rs70 billion and decided to incentivise retailers through provision of tax credits.
Through provision of tax credits, these PoS machines would be installed at tier-1 retailers. PoS machines were installed at about 10,000 shops of tier-1 retailers after which the sale went up by Rs100 billion from Rs564 billion to Rs670 billion and the FBR collected Rs14 billion in the outgoing fiscal year. The FBR identified 7.4 million potential tax dodgers and the tax machinery assessed that it required additional resources to bring administrative efficiency for achieving the desired results. It is the estimates of the FBR that it requires 1 per cent resources out of total collection of the tax machinery. The FBR will have to depute additional workforce at the RTOs level to bring potential tax dodgers into the tax net.
Under the existing laws, the FBR requires sending of notices and after receiving no replies and meeting other requirements, ex-party assessment can be done if the taxpayers do not bother to respond to two notices.
“In the aftermath of withdrawal of Rs100 billion taxes proposed on mobile phone calls exceeding 3 minutes, 10 paisa tax on SMS and Rs5 per GB on internet usage would make it further hard for the tax collection machinery to materialise its desired target of Rs5.829 trillion in the coming fiscal year” top official sources confirmed to The News here on Tuesday.
The FBR will have to rely upon effective enforcement to materialise highly ambitious tax collection targets of Rs5.829 trillion.
When contacted, Special Assistant to PM on Finance and Revenues Dr Waqar Masood said it was an initial meeting in which it was decided to expand installation of the PoS system and bring potential taxpayers into the tax net. He said that the FBR’s data would be integrated with the NADRA to bring potential non- filers into tax net.
According to an official statement issued by the FBR, Minister for Finance and Revenue Shaukat Fayyaz Ahmed Tarin visited the FBR Headquarters on Tuesday and held a meeting with FBR officers.
The agenda of the meeting was to devise a strategy to increase integration of retailers with the Point of Sales system of the FBR. The meeting discussed the way forward to bring identified potential taxpayers into tax net. Dr Waqar Masood Khan and Chairman FBR Asim Ahmad along with other members of the FBR were present in the meeting. The chairman FBR said the licensing of IT companies for installation and configuration of the PoS system would be completed by the end of August. He said monitoring cells would be formed in each RTO headed by the chief commissioner concerned to supervise the PoS integration for achieving desired results. The minister for Finance and Revenue directed ensuring effective tracking progress of installed PoS machines and provide post-deployment support to the retailers. He directed determining the total volume of sales by the retailers to effectively tap the revenue generation through PoS system after adjustment of input and output taxes. He directed establishing a cell at the FBR Headquarters to fast-track the progress on PoS integration.
The meeting discussed the strategy to increase the tax net possibilities. The FBR team briefed that a sizeable number of potential taxpayers have been identified after retrieving available data of their withholding taxes through third party sharing. The chairman FBR briefed that efforts are being made to bring all identified potential taxpayers into the tax net. The minster for Finance and Revenue directed removing all hurdles in bringing the identified potential taxpayers into the tax net.
He directed identifying the potential taxpayers on the basis of third party data being received through credible sources. The minister stressed the need to finalize the modalities of third party audit which would not only increase the tax net but also generate much-needed revenue. The meeting ended after it was decided to hold regular meetings to pursue the targets on a fast-track basis.