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March 3, 2019

Government may exempt penalties on tax payments

Business

March 3, 2019

KARACHI: The government is considering an amnesty scheme to exempt default surcharge and penalties on tax payment of outstanding amounts, in a move to achieve over four trillion rupees annual revenue target, well-placed sources said on Saturday.

The sources said the apex tax authority Federal Board of Revenue (FBR) would take major decisions next week to meet massive shortfall in revenue collection for the current fiscal year of 2018/19.

A chief commissioner/commissioner conference is scheduled on March 7 in Islamabad to discuss the latest revenue collection situation and devise future strategies.

The FBR is facing a massive revenue collection shortfall of around Rs237 billion during the first eight months of current fiscal year.

The revenue body provisionally collected Rs2.328 trillion during July-February 2018/19 against the target of Rs2.565 trillion.

Revenue collection deteriorated and posted only three percent increase from Rs2.259 trillion in the corresponding months of the last fiscal year.

The sources said the FBR is required to collect another Rs2.070 trillion in the remaining four months of the current fiscal at an average of more than Rs500 billion a month. Average monthly collection of the FBR is Rs291 billion in the first eight months of the current fiscal year.

A senior official at the FBR said the tax authorities would not be able to achieve the target considering the present revenue collection situation. “I am afraid the FBR will not even be able to match the last year’s revenue collection,” the official said, requesting anonymity.

The FBR collected Rs3.842 trillion during the last fiscal year of 2017/18.

The FBR was given Rs4.398 trillion collection target for the current fiscal year, which is 14.5 percent higher than the collection of the last fiscal year.

The revenue body collected Rs1.585 trillion during March-June FY2018.

If revenue collection growth of three percent continues then the FBR could be able to collect Rs1.634 trillion during the last four months of the current fiscal year. And, thus annual revenue collection is expected to come at around Rs3.962 trillion.

The FBR has already requested the finance ministry to revise down the revenue collection target.

The sources said the FBR at the upcoming commissioners’ conference would direct the tax officials to take all possible measures to maximise revenue generation during the four months.

The sources said the FBR has already launched massive campaign of broadening of tax base to identify potential taxpayers. Besides, action has also been launched against local and offshore tax evasion.

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