FBR misses August tax target

ISLAMABAD:

The Federal Board of Revenue (FBR) has so far collected Rs593 billion in the current fiscal year, up by only 1.9%, but its collection for August again recorded a negative growth, posing challenges to the tax machinery amid uncertainty about its leadership.

August did not bring good news for the tax machinery. The monthly collection fell short of the target and the FBR’s other initiative to electronically integrate all big retail stores to curb tax evasion also bit the dust.

The FBR’s second initiative - taking corrupt people to task - also faces yet another test as a summary to initiate inquiry against two officers of grade-20 on corruption charges has remained stuck at the table of Prime Minister Imran Khan for the past over five weeks.

Cumulatively, the FBR collected Rs593 billion in taxes during July-August of current fiscal year, which were higher by Rs11 billion or only 1.9% over the same period of previous fiscal year, according to FBR officials.

The FBR has set a low tax collection target for the first few months as the economy recovers from the aftereffects of the coronavirus pandemic.

The first two months’ target was Rs551 billion, which the FBR surpassed by Rs42 billion, thanks to higher collection in July.

The FBR missed the tax collection target for August by Rs15 billion. It could not keep the previous month’s momentum and the collection in August showed a negative 2% growth.

As against Rs299 billion collection in August last year, the FBR received Rs293 billion in August this year, according to the FBR officials.

Against the low target of Rs308.4 billion for August 2020, the FBR could provisionally collect Rs293.3 billion, according to official figures. The Rs308.4 billion target was only Rs9.7 billion or 3.24% higher than the collection in August last year.

The sole reason for missing the monthly target was the low collection of income tax. The FBR’s decision to change the jurisdiction of about 1,700 taxpayers also played a negative role.

The FBR faces a challenging situation at a time when there is no permanent chairman the revenue board. Prime Minister Imran Khan has appointed five chairpersons and is said to be in search of the sixth one.

Tier-I drive fails

The multiple times extended deadline to electronically integrate tier-1 retailers with the FBR’s online system ended on Monday without success. As against registered 7,834 point of sales, less than 500 or about 6.3% could be registered, according to the FBR officials.

Out of these mere 500 taxpayers who opted to register with the FBR, the retailers who were actually configured with the FBR’s data system were hardly 290 or 3.6% of the big retailers doing business in Pakistan. Former chairman FBR Shabbar Zaidi had launched the tier-I retailers registration drive about a year ago.

There is one grade-21 level officer heading the retailer-1 initiative but he has not been given any workforce to enforce his orders.

Weeding out corrupt officers

The FBR’s member administration, Mohammad Bakhtiar, member human resource management Mohmmad Ali Indhar and Member Taxpayers Audit Nadeem Rizvi held a press conference to brief media about Integrity and Performance Management Unit (IPMU).

Since beginning of July, the FBR has initiated proceedings against 76 officials and ten out of them have been dismissed, said Mohammad Bakhtiar.

Bakhtiar said that before July there were only 37 pending inquiries.

There was a resolve that the FBR would not tolerate any corrupt practices and all such officers would now be taken to the task, said Bakhtiar. He, however, maintained that the process may be time consuming due to procedures defined under the Civil Service Act and its rules.

The Integrity and Performance Management Unit (IPMU) has been receiving complaints through website, social media, call centres and in writing against the FBR officers. The complaints filed with names and address are immediately put in process where top ranking officers investigate the complaints, said member administration.

Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh has directed that all officers who were facing inquiries, should immediately be taken off the duties, said the member administration.

However, a summary for initiating inquiry against two officers had been sent to the Prime Minister’s Office last month but no approval has been received yet, said the member administration while responding to a question. He said that there was no time limit for giving approvals by the PM.

The FBR was also revisiting the rules that authorise a chief commissioner to grant 30 performance rewards. Bakhtiar defended chief commissioner Aftab Imam’s decision to give 36 salaries in rewards to the officers. “There is nothing illegal in it but on moral grounds it can be debated,” said the member administration.

PM Portal timeline will be followed, the PM office has given instructions to review 335 complaints that the FBR had closed, said Bakhtiar.

Published in The Express Tribune, September 1^st, 2020.

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