ISLAMABAD: A meeting of the Finance Standing Committee of the National Assembly has sought a plan from the Finance Ministry and the Federal Board of Revenue (FBR) about how the revenue collection target that appears almost impossible, would be achieved, after the committee members, expressed concern that the shortfall in revenue collection and more borrowing by the government would widen the fiscal deficit.
A meeting of the Finance Standing Committee of the National Assembly presided over by Faiz Ullah Kamoka on Monday was informed that the FBR would require to collect Rs2.8 trillion taxes in the remaining six months of the current fiscal year, which would require 30 percent growth, which appears impossible.
Committee members Syed Naveed Qamar stated that the government had already borrowed massively and would be borrowing even more due to the shortfall in the FBR revenue collection.
The government borrowing and the shortfall in tax collection would widen the fiscal deficit, he added.
The FBR’s total revenue collection was Rs2.2 trillion, the meeting was told, and the committee decided to seek fiscal deficit projection and actual number for the first half of the current fiscal year to know the slippage following shortfall in tax collection during the first half of the current fiscal year.
The chairman of the committee emphasised the need for smart taxation and out-of-the-box solution to increase revenue collection.
It is almost impossible for the FBR to achieve Rs4.9 trillion revenue collection target for the current fiscal year, remarked the chairman of the committee.
He further stated that the country’s requirement or breakeven point is Rs8,000 billion tax collection but we are unable to collect Rs4.9 trillion.
At least, we should reach breakeven point, so that the country does not have to repeatedly go to the International Monetary Fund (IMF) programme, he added.
The FBR briefed the committee about the sales tax refund, and stated 110,000 applications were received and made Rs99 billion income tax refunds payment.
The committee was further informed that Rs313 billion income tax and Rs187 billion sales tax refunds were pending.
Dr Pasha said that only 18 percent people have been paid refunds by the FBR, and the remaining 82 percent were pending.
Member Inland Revenue Dr Ishfaq informed the committee that the FBR has not taken advance taxes from the industry nor undue demand was on the taxes from the industry due to the COVID-19, and subsequent efforts to revive the economy.
Additionally, he said that there was no refund pending of any exporters.
He said that the FBR that the tax officials were not given targets for revenue collection rather they were asked to facilitate the taxpayers.
The meeting was told that four million returns have been filed this year with tax payment of Rs46 billion, which is 100 percent increase over previous year.
The chairman of the committee asked the FBR to let the committee know about the measures that would be taken in the next budget to broaden the tax base by bringing into the tax net those who are out of it, instead of burdening those already paying taxes.
Copyright Business Recorder, 2021
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