Tax collection improves since unearthing of container scam

FBR collects Rs1b more every month with a sharp fall in smuggling.

LAHORE: Federal Tax Ombudsman (FTO) Dr Shoaib Suddle has claimed that the Federal Board of Revenue (FBR) has been collecting an additional Rs1 billion every month with a 60% decline in cargo smuggling since January last year when the FTO unearthed the Nato container scam.

He called it mother of all scams and boasted that his office had done national service by saving billions of rupees of the national exchequer.

He was speaking at a seminar organised in connection with the signing of a memorandum of understanding between the Business Forum of Punjab and FTO.

“I am the ombudsman of taxpayers and not of tax evaders,” he said, adding sustainable economic growth was only possible through a broadened tax base in a fair way and totally free of extortion.

Tax collection was a more critical function, as a country could only be run with taxes and not through army and police, he remarked.

Suddle said tax-to-GDP ratio had come down to 8.2% last year and was dropping every year. “The ratio cannot be improved without complimenting and synergising our efforts.”

The ratio was 13.8% in 1997 and efforts were under way to raise it up to 20% at that time. However, he said, the ratio fell drastically, posing a huge challenge to the tax collectors to raise it back to ideal levels.

At the same time, Suddle insisted that the FTO would not allow any coercive or arbitrary moves to enhance the tax-to-GDP ratio, other than legal procedures.

He pointed out that no complaint of taxpayers had been pending with the FTO that was filed before 2008. Furthermore, the complaint resolution time has been reduced to 60 days from 170 days earlier.

Suddle said 85% of FTO decisions went in favour of the taxpayers and Rs7 billion was refunded to the business community in 2010, which was 36 times more than the average of last nine years.

According to Transparency International, he said, the Corruption Perception Index of Pakistan has slightly improved to 2.5 in 2011 against 2.3 in 2010 due to the performance of FBR, judiciary and Public Accounts Committee (PAC).

Published in The Express Tribune, April 19^th, 2012.