FBR hides actual flood tax collection target

Tax authority manages to collect only Rs8b against target of Rs36b.

ISLAMABAD:

In yet another case of misleading parliamentarians, the Federal Board of Revenue (FBR) said on Friday the government’s flood surcharge collection target was Rs36 billion, a figure which was Rs16 billion higher than what the FBR earlier reported to parliament.

FBR Chairman Salman Siddique, in a testimony to the National Assembly Standing Committee on Finance, said the government had set Rs36 billion collection target on account of 15 per cent flood surcharge on payable tax. On March 15, when the government levied this surcharge to raise money for the rehabilitation of flood-stricken people, it gave the target of Rs20 billion in a press release. Later on, the same figure was given to parliament.

Experts see this as an attempt to hide the actual impact of the levy. At that time, the government claimed that new taxes would lead to an additional revenue of Rs53 billion and even then the FBR failed to achieve the annual tax target and indulged in figure fudging.

As if it was not enough to surprise many who were present in the standing committee meeting, the FBR chairman disclosed that the tax machinery could collect only Rs8 billion as flood surcharge. Citing the reason, he said all big corporations refused to pay the tax, taking the plea that their financial year ended in December and the ordinance was meant to impose the tax in the last quarter of financial year 2010-11.

He admitted that the “confused legal language of the ordinance” provided an opportunity to the corporate sector to avoid the levy. When every common citizen paid the additional tax for flood-hit people, the rich class again exploited legal lacunas in its favour, thanks to the FBR’s inefficiency.

Siddique said the government had called a meeting of experts today (Saturday) to review legal issues and find a way to get the corporate sector pay its tax liability.

“The purpose was to raise money at a time when the government had no additional resources, now it would not serve any purpose,” said former information minister Qamar Zaman Kaira. He said owing to scarcity of resources, the government had been unable to pay the remaining tranche of Rs80,000 each to the flood-affected people.

Kaira criticised the FBR for failing to perform its duties, providing an opportunity to the corporate sector to avoid tax payment at a critical time.

Missing containers

The FBR also briefed the committee about the latest position on the missing Afghanistan’s commercial and Nato’s non-commercial containers.

Siddique said according to the final report, out of 350,000 transported containers, 23,952 went missing over the past two and a half years. He said all these were commercial containers and Nato’s containers were in addition to this figure. There were only 265 Nato and Isaf containers that had gone missing.

He said based on the declared value of commercial goods, the FBR had estimated losses of Rs50 billion and if there were weapons and ammunition in these containers then the figure would be much more than this.

The FBR chairman said the National Logistics Cell (NLC) being the transporter was responsible for all the missing containers and the government had issued notices to it. He said the government had decided to involve the private sector for transit of goods but the NLC was pressuring the government to maintain its monopoly.

He claimed that the government had taken corrective measures and during the past five months smuggling under the Afghan transit trade had dropped significantly, which could be gauged from the fact that Afghan imports fell by 54 per cent. Non-commercial Nato imports also fell by 32 per cent.

Published in The Express Tribune, September 10^th, 2011.