Chairman Federal Board of Revenue (FBR) Nisar Muhammad Khan has conceded a decline in collection of direct taxes by 2 percent as a percentage of total tax collection in 2015-16 over previous fiscal year and maintained that Rs 105 billion budgetary measures of direct taxes were taken in the current fiscal year.
While briefing the Senate Standing Committee on Finance Chairman by Senator Saleem Mandivwala here on Wednesday on tax collection for the last fiscal year and target for 2016-17, the FBR chairman admitted that direct tax collection as percentage to the GDP has declined from 40 percent in 2014-15 to 38 percent in the just ended fiscal year.
The committee showed serious concern over a low share of direct taxes in the total tax collection of the FBR and also wants measures to be taken to bring in new taxpayers instead of burdening those already in the tax net.
The Chairman of the committee pointed out, "there was a two percent fall in direct taxes during the last fiscal year". The Chairman FBR stated "we have taken total Rs 127 billion budgetary measures in the current fiscal year and out of these Rs 105 billion are related to direct taxes. First time in many years, we have not downward revised revenue collection last fiscal year and met the estimated projection," he added.
He further stated "we are taking fiscal measures to penalise the non filers and making cost of doing business very higher for making them filers. Nisar Muhammad Khan also complained that people are not ready to pay taxes and cited the example of traders, saying that various schemes were launched on their requests but they are not ready to file their returns.
Chairman of the committee also pointed out that taxpayers have approached the committee and complained of facing harassment and insult from tax officials. He stated that there are complaints of police raids at the offices of chambers. Chairman FBR responded that taxpayers are eve considering tax notices as harassment and claimed that there were number of cases where substantial tax evasion was involved.
Chairman FBR also stated that tax authorities do not have any power to issue concessionary SROs and Economic Co-ordination Committee (ECC) can issue SROs in four or five specific circumstances. Even the federal government cannot issue concessionary SRO, however, the Parliament, if wants, can do so. "Tax authorities issue some SROs for implementation of tax measures taken in the budget," he added.
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