FBR eyes Rs900bln in May-June to meet annual revenue collection target

KARACHI: Tax authorities are confident about meeting the revenue collection target of Rs3.621 trillion, set for the current fiscal year, as they are expecting recovery of hundreds of billions rupees in court cases, a senior official said on Saturday.

“This fiscal year’s target of Rs3,621 billion would be achieved,” Rehmatullah Khan Wazir, member Inland Revenue (Operation) said. “In this regard, FBR (Federal Board of Revenue) has already taken initiatives, such as recovery of outstanding and stuck amount in the litigation cases.”

Wazir said FBR would able to collect around Rs900 billion during the last two months, which would be sufficient to meet the collection target for fiscal year 2016/17.

FBR managed to collect Rs2,258 billion in revenue during the July-March period of the fiscal year of 2016/17, up 7.88 percent over the same period a year ago. It, however, needs to collect Rs1,362.8 billion in the last quarter (April-June) to meet the yearly target.

The member operation said around Rs300 billion is stuck in various court cases. FBR requested the chief justices of all the four provinces to give priority to the cases in which revenue is involved.

The Sindh High Court, consequently, issued a circular, ordering that all the pending and fresh tax cases on original and appellate sides should be treated on fast-track basis, he added.

Wazir said the government has also constituted alternate dispute resolution committee (ADRC) for an early disposal of the cases. “At least 15 cases have been referred to ADRC.”

He said FBR is considering increase in tax rates on non-filers as well as other measures in the next budget to expand tax base.

The official said proposed harsh measures against non-filers in the forthcoming budget of 2017/18 will include increase in withholding tax rates and raids on premises of non-compliant taxpayers.

The government introduced Section 236P into Income Tax Ordinance 2001 through Finance Act 2015 in order to increase the cost of transactions for non-filers and encourage them to file annual returns and wealth statements. The tax rate was initially imposed at 0.6 percent, but after an agitation from the traders the government reduced it to 0.3 percent on July 11, 2015. The rate remained applicable till March 2016. However, after realising that the return filing remained unimpressive the government increased the rate to 0.4 percent, which is applicable till June 30.

In July-March, FBR collected only Rs8.91 billion on account of withholding tax on non-cash banking transactions, down 3.67 percent over the last year.

Wazir said government intends to create difficulties for non-compliant taxpayers through increase in the cost of transactions in the next budget. But, the tax authorities would also increase facilitation services for the compliant taxpayers to enable them to discharge their liabilities, he added.

The tax executive asked non-filers to file their income tax returns before June 30 in order to avoid fine and penalties beside additional tax burden, which might be announced in the budget 2017/18.

Monitoring of withholding tax has been tightened to ensure tax deduction and deposit by the withholding agents, he added.