ISLAMABAD: The Federal Board of Revenue (FBR) is determined to bridge the gap by enhancing its enforcement and bringing potential taxpayers under the tax net, said FBR Member Inland Revenue Policy Dr Hameed Ateeq Sarwar.
Briefing the media on Thursday, he said the number of income tax return filers had improved to 1.76 million in first eight months of the current fiscal year from 1.3 million in the corresponding period of the previous year.
The FBR official added that revenue collection stood at Rs2.33 trillion by February against the target of Rs2.57 trillion. Sarwar shared with the media that the FBR had received 455,806 new tax returns compared to the same period of last year. He said the government had fixed the revenue collection target at Rs4.398 trillion for fiscal year 2018-19 in order to meet financial requirements of the country, adding that it was required to collect Rs2.566 trillion by the end of last month (February).
Enumerating reasons for the shortfall in revenue collection, the official said fluctuation in prices of petroleum products, including liquefied natural gas (LNG) and furnace oil, were largely responsible for the decline. The government had decided to absorb these shocks and reduced tax rates on petroleum products to facilitate the common man. This caused a reduction of Rs75 billion in the total collection.
The Inland Revenue Policy member was of the view that the measures taken by the previous government to increase exemption for the salaried class also led to a revenue shortfall of Rs35 billion.
Steps taken to bring down imports and restrict the current account deficit were also cited as a reason for the decline in revenues, which fell by Rs20 billion. The official added that accumulated revenue losses of Rs15 billion were faced due to other sectors including cement, fertiliser and ban on the purchase of vehicles by non-filers of tax returns.
The tax refund bonds issued by the government worth Rs15 billion also dented revenues as people started to opt for the scheme. The official revealed that 78 claims had been received so far.
Sarwar clarified that there was no change in the tax on cash withdrawal from banks, adding that the rate was 0.6% for transactions exceeding Rs50,000 for non-filers. He said there was no tax amnesty scheme under consideration, adding that the FBR was working to promote tax return filing.
Published in The Express Tribune, March 29th, 2019.
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