ISLAMABAD – Chairman Federal Board of Revenue (FBR) Shabbar Zaidi on Monday said that International Monetary Fund (IMF) had not agreed with the government to reduce the annual tax collection target during current fiscal year as Pakistan wanted to slash the target by Rs300 billion.
He said that government had demanded of the IMF to reduce the annual tax collection target of Rs5.55 trillion as the FBR is struggling to achieve the target due to reduction in imports of the country.
However, the IMF had not agreed on it yet. He was optimistic that Pakistan would convince the Fund on downward revision of the tax collection target.
He made these remarks in Senate Standing Committee on Finance and Revenue, which met under the chair of Senator Farooq H Naik.
Chairman FBR further informed the committee that FBR had collected Rs1280 billion in first four months (July to October) of the ongoing fiscal year as against the target of Rs1447 billion.
The FBR has faced Rs167 billion shortfalls in four months period. Tax collection had shown 16.3 percent growth in July to October period of the current fiscal year. He also briefed the committee on the government’s efforts of broadening tax base of the country.
Discussing details of increase in number of tax payers in the current financial year the Committee was informed that an increase of 65.2 percent was observed vis-a-vis the corresponding period of last year. The Committee was also informed that out of 2655081 return filers, 888748 new tax payers have been added.
The number of individuals that availed Asset Declaration Ordinance 2019 was 124,208. Tax payers of Rs4.7 billion under the present scheme was also observed
Shabbar Zaidi said that the government has decided to put the restructuring plan of Federal Board of Revenue (FBR) on hold to address the concerns of senior officers.
The senior officers of FBR are against the restructuring plan to convert the incumbent Federal Board of Revenue (FBR) into Pakistan Revenue Authority (PRA).
Deliberating over steps taken to get Pakistan out of the FATF Grey List, the Committee was informed that Pakistan is committed to align the country with global financial system and position Pakistan as a reliable partner in countering global ML/TF challenges.
Towards this end Pakistan has formalized Internal Action Plan to revamp legal regulatory and supervising framework. It was asserted that legislative re-vamp in banking and financial systems, institutional reorganization and capacity building, addressing enforcement e-governance and financial challenges, autonomy of regulatory framework and regimes while ensuring permanency of newly raised structures. In addition to this, Pakistan seeks to revamp the entire AML/CFT Regime. According to FATF assessment Pakistan has largely addressed five out of 27 action items.
While discussing details of smuggling of LED TVs the Committee was informed that the ongoing momentum of countrywide enforcement operations against smuggling of goods including LED TVs is in full swing, these measures have geared an increase of 40 percent during FY 2018-19 when compared to previous financial years.
The main challenge found by the agency has been a ban on recruitment which has now been removed. The Committee stressed the need for training of forces that have been granted anti-smuggling powers such as the Coast Guards and Frontier Corps.
Reviewing whether increases in taxes and duties have contributed to a rise in smuggling of goods, the Committee was informed that there is zero percent tax on raw material. This was done specifically to encourage industrialization. The Committee encouraged formulation of legislation for this purpose.
Chaired by Senator Farooq Hamid Naek, the meeting was attended by Senator Syed Shibli Faraz, Senator Mohsin Aziz, Senator Mian Muhammad Ateeq Shaikh, Senator Muhammad Akram and senior officers from the Ministry of Finance Revenue and Economic Affairs, FBR, State Bank Of Pakistan, Customs of Pakistan along with all concerned.