Minister of Finance Abdul Hafeez Shaikh said here on Thursday that as many as 700,000 potential rich persons would be brought into the tax net in the next two years. Dr Sheikh said that by the Federal Board of Revenue (FBR) had identified millions of rich people during 2011-12 and efforts were under way to register them with the tax department, fulfilling all legal formalities.
Sharing an update on the registration of 700,000 individuals selected last year, Abdul Hafiz Shaikh said that brining potential rich persons in the tax net a difficult task because no one was ready to pay taxes. The FBR, he said, would try its level best to complete the process over the next two years. The FBR, he said, had shown some positive results, as the process of registration was a lengthy one and legal requirements had to be fulfilled in this regard.
According to him, the FBR has identified 475,000 rich persons who were operating under informal economy. He reminded that the government had said last year that the exercise would be completed in three years and said that during the first year, the tax machinery had identified a large number of new taxpayers.
He said that in the existing tax culture, where influential and powerful persons were not ready to pay taxes, "it is very difficult to bring them into the tax net". FBR Chairman Mumtaz Haider Rizivi stated that the board had served notices on 463,000 individuals under relevant provisions of the Income Tax Ordinance, 2001.
Of the total, 238,000 persons million filed their income tax returns in response to the notices, he said, adding that the board had finalised 64,000 income tax assessments. Their total income tax liability was around Rs 10 billion, he said, adding that so far, Rs 1.3 had been recovered.
About the progress of revenue collection, Abdul Hafeez Shaikh said that the FBR had so far collected Rs 1,450 billion during the first 10 months of the current fiscal year (July 2011-April 2012) against Rs 1,120 billion collected in the corresponding period of the last fiscal, reflecting an increase of 25 percent.
"This is for the first time in Pakistan's history that the government is maintaining a 25 percent growth in revenue collection. So far, the FBR's performance is satisfactory. In fact, the revenue collection target of Rs 1,952 billion set for 2011-2012 is very ambitious. It is a very difficult target and we will try our level best to achieve the target by the end of the current fiscal. If we achieve the revenue collection target, it will be a historic achievement of the FBR." When asked about the declining tax-to-GDP ratio, the Finance Minister said that he was optimistic that the tax-to-GDP ratio would be increased from 9 to 10 percent during the current fiscal.
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