Withdrawal of tax relief in budget: Tax experts project 20 percent annual growth in collection

Tax experts of a chartered accountant firm have projected 20 percent annual growth in revenue collection of the Federal Board of Revenue (FBR) after withdrawal of certain tax relief given in budget (2018-19). A study submitted by a leading tax expert Ashfaq Tola, President Tola Associates, to Finance Minister Asad Umar, given the supposition that PTI government scraps the budget presented by previous government for 2018-19 and tables a new budget, the experts have projected key economic indicators for the future five years, with certain assumptions, which are to be governed by Pakistan Tehreek e Insaf (PTI).
During first year, revenues are estimated to be Rs 6,119 billion which is expected to increase each subsequent year, reaching a maximum of Rs 11,967 billion in 2022-23. During their tenure of five years, PTI is expected to add Rs 43,950 billion in revenues, the study said.
The study said that Prime Minister Imran Khan announced to collect Rs 8,000 billion from taxpayers during his regime. Statistically speaking, this figure is very much within reach even if no extraordinary efforts are done by PTI. During both PPP's and PML-N's last tenure, the tax revenue figures have almost doubled during both tenures, therefore, collection of Rs. 8,000 in next five years would be no miracle.
Experts have assumed that PTI would collect Rs 5,000 billion during first year of their regime which would increase by 20% each year. By 2023, the tax revenue collection may jack up to Rs. 10,368 billion following this trend, study said.
The study said that non-tax revenues have been assumed to be increased generally by 10% each year. Receipts on account of Defence (Coalition Support Fund) during first year are expected to be same as last year, which would be approximately zero for subsequent years. After removal of legal hindrances, Gas Infrastructure Development Cess is expected to contribute at least Rs. 100 billion for first year, increased by 10% during each subsequent year. However, new government claimed to abolish this cess. Whether his claim is implemented or not is yet to be determined. Receipt from United Nations peace keeping missions are expected to remain at Rs. 35 billion per year.
Total non tax revenues are expected to be Rs. 1,119 billion for first years which may rise to Rs. 1,599 billion during last year, adding a total of Rs. 6,742 billion for five years, study added.