The Federal Board of Revenue (FBR) will release all pending tax refunds up to Rs5 million by March 15, 2016, a top official said Tuesday. Talking to media after formal inauguration of Large Taxpayers Unit (LTU)-II at RTO Building, FBR Chairman Nisar Muhammad Khan said the board on the directives of Finance Minister Ishaq Dar would release all pending tax refunds up to Rs5 million by March 15.
He said the board had a revenue shortfall of Rs5 billion in first half of current fiscal year and the revenue impact of new tax measures taken by the government under mini budget was only Rs4.5 billion during said period. Moreover, the FBR Chairman said the board had witnessed 18 percent growth in revenue collection during July-February period, indicating that they were on right track to achieve annual budgetary target of Rs3,104 billion.
He said the Voluntary Tax Compliance Scheme (VTCS) was announced on traders' request after the imposition of 0.6 percent WHT on non-filers and added that the rate of WHT was later reduced to 0.3 percent after traders' hue and cry and now it had again been increased to 0.4 percent from March 1, 2016.
He said extension of 15 more days for VTCS, which had so far not yielded the desired results, was aimed at facilitating traders for tax registration and added that the board despite having complete details of non-filers was keen to bring them into tax net under amicable manner.
Earlier in his formal address, chairman FBR said that tax to GDP, which was reported around 0.5 per cent last year, was presently roaming around 0.8 per cent with one million registered taxpayers, which he termed as almost nothing in a country like Pakistan. He said that workforce in FBR was unmotivated, due to weak enforcement and lack of resources and added that these were the biggest challenges for FBR. Nisar further stated that there was the need of good governance, effective workforce and taxpayers' confidence to meet these challenges.
Later, Dr. Irshad Khan, member IR, operation said that the concept of LTU was conceived by FBR in 2013 but LTU model was not fully utilised. He further said that now the board was implementing TARP-II agenda in true spirit to facilitate the taxpayers at optimum level. He said that more LTUs would be established in other parts and added that one more LTU in Karachi was also in the cards to meet the requirement.
Earlier in her keynote address, Nosheen Javed, first chief commissioner of LTU-II said that unit would provide a privileged environment to the taxpayers where they would feel encouraged in adhering to their tax obligations. She said that LTU-II would also promise win-win scenario for both taxpayers and the tax collectors.
She said the idea behind LTU-II was to ensure efficient and effective tax management for the taxpayers and to generate optimal revenue results for the government. She added that they had started the LTU-II with 562 cases, which had been selected on the basis of their Rs. 400 million turnover or Rs. 20 million tax payments. The directors of large taxpayer companies also come in the ambit of LTU-II. A large number of FBR officials, tax consultants, businessmen and others were present on the occasion.
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