The Ministry of Finance has assured the Federal Board of Revenue (FBR) of full backing of the government for initiating enforcement measures against the non-compliant taxpayers to meet the revenue collection target of Rs 1380 billion.
Sources told Business Recorder here on Saturday that FBR and Tax Advisory Council have found that the change in the advance tax payment system could be one of the major reasons of revenue shortfall in the first quarter of 2009-10.
However, Ministry of Finance, FBR and the Tax Advisory Council developed consensus to take enforcement actions against the non-compliant businessmen, without causing harassment.
Sources said that the advance income tax collection in the first quarter (July-September) of 2008-09 stood at Rs 22 billion. Though this year this tax shall be paid by October 15 ie in second quarter of financial year 2009-10, yet the banks are paying their advance tax on monthly basis. It has been estimated that if the current target for the first quarter is considered without the advance tax, net shortfall in the income tax is estimated to be around Rs 40 billion by September 30, 2009. However, the FBR has surpassed the sales tax and federal excise duty targets up to the monthly of August, 2009. On the other hand, the target of the customs duty up to August 2009 is short by about Rs 3.5 billion.
Due to statutory amendments in this year, advance tax for the first quarter is due by October 15, instead of September 15. Therefore, the target for the first quarter is due by October 15, instead of September 15. Therefore, the target for the first quarter will be subdued but that for the month of October in the second quarter should be higher than planned.
Historically, major portion of the annual revenue comes in the third and fourth quarters of the fiscal year because in the first half of the year audit of taxpayers is being completed and in the second half its recovery is being made. These recovery proceedings also helped in improved revenue collection in the second half of financial year. The corporate profitability lags the economy and hence revenue generation process may take off with steeper slope in the second half of the year.
Sources said that the FBR and the Tax Advisory Council are jointly working on strategy to meet the ambitious revenue collection target of Rs 1380 billion by the end of current fiscal year.
Comments
Comments are closed.