FBR sees existing measures enough to meet revenue target

KARACHI: Tax authorities expect ongoing measures would bring the desired results for revenue collection during the current fiscal year of 2016/17 and no new steps are being planned, at least for the near-term despite a major shortfall in tax target for the first quarter, officials said.

The Federal Board of Revenue (FBR) failed to collect targeted revenue in July-September quarter and faced around Rs50-55 billion in shortfall. But, tax officials said revenue collection mostly remained below the target in the first quarter.

The FBR estimated Rs675 billion of revenue collection for the first quarter out of the total fiscal year target of Rs3,621 billion. The revenue body provisionally collected Rs625 billion during July-September 2016.

A senior tax official said the authorities decided to explore the revenue potential through measures including audit, monitoring of withholding taxes and efforts to broaden the tax base.

The official said no additional revenue measures are on the cards. The FBR faced similar situation last year and introduced additional measures through imposition of regulatory duty on October 30, 2015.

The official said the ministry of finance and FBR officials agreed, during the recent meetings, to tighten the noose around tax evaders and non-compliant taxpayers.

The official said the tax departments would be asked to further strengthen the audit exercise as this segment failed to yield revenue collection during the last fiscal year. In the fiscal year, the recovery, through audit exercise, fell 24 percent due to officers’ jurisdiction related teething problems in newly-installed Iris programs and arrears stuck in litigation at various levels.

The official said the authorities are confident to collect substantial revenue under withholding tax regimes, as the FBR in the latest fiscal year further expanded the difference in tax rate for filers and non-filers. The official said the issue of property valuation was discussed at length at the meetings. 

The official hoped that significant amount would be realised under capital gain tax and withholding tax on sale and purchase of immovable properties. Further, the official said tax departments would be asked to monitor collection of withholding tax on cash withdrawal and deduction at non-banking transactions.

Sources said the FBR will also resort to harsh measures against persons detected through efforts of broadening the tax base. A bulk of notices has been sent to persons having taxable income but not on the tax net. The official said the FBR headquarter as well as tax departments will enhance their efforts to finalise cases in order to realise revenue and expand the tax net.