ISLAMABAD: Federal Board of Revenue (FBR) Chairman Dr Muhammad Ashfaq Ahmed has said that the FBR has provisionally collected Rs 850 billion during July-August (2021-22) against the assigned target of Rs 690 billion, reflecting an increase of Rs160 billion.
Flanked by Member Customs Operations Syed Muhammad Tariq Huda, Member IT Ashfaq Ahmad Tunio, and Chief Information Officer Mansoor Azam Sultan, the FBR chairman was optimistic to exceed the assigned target and shared latest revenue collection figures for 2021-22 during a press briefing held here at the FBR House, on Tuesday.
He also announced his roadmap for restructuring tax machinery and growth of 45 percent in revenue collection in the second month of the current fiscal year.
The FBR chairman said that the achievement of the target is 123 percent during the first two months of 2021-22. The FBR has probably collected over 50 percent of taxes from the imports including food items, machinery/equipment and raw materials, which are ultimately consumed in the domestic manufacturing in the country.
He said that the FBR’s provisional tax collection stood at Rs850 billion during July-August (2021-22) against Rs603 billion in the same period of 2020-21, showing a growth of 41 percent.
According to him, “We are in an enforcement mode. The trust level of the taxpayers in the FBR has increased. This is evident from the number of complaints filed with the Federal Tax Ombudsman, which has been drastically decreased. Around 90 percent complaints were related to the refunds, which have been addressed. Hardly only 10 percent complaints are left with the FTO Office”.
Break up of revenue collection during July-August 2021-22 revealed that the income tax collection stood at Rs254 billion against the target of Rs208 billion, reflecting an increase of Rs46 billion. Sales tax collection was Rs410 billion against Rs321 billion, showing an increase of Rs89 billion. The Federal Excise Duty (FED) collection was Rs46 billion against a target of Rs45 billion, reflecting a growth of one billion rupees. Customs duty collection was Rs140 billion against the target of Rs116 billion reflecting a growth of Rs24 billion.
The FBR has provisionally collected Rs434 billion in August 2021 against the target of Rs349 billion, reflecting an increase of Rs85 billion (125 percent achievement of target).
The FBR has collected Rs434 billion in August 2021 against Rs300 billion in August 2020, reflecting a growth of 45 percent, he said.
Based on the performance of the first two months of current fiscal year, Dr Ashfaq said that he was optimistic to achieve the revenue collection target for the current fiscal year. “We will achieve our revenue target as the economy has already picked up momentum”.
Dr Ashfaq highlighted that his focus will be on automation, facilitation of taxpayers, simplification of tax laws, improving tax enforcement and taking measures of ease of doing business in the country. He further said that his priority focus will be on revenue generation while also focus on reforms as well.
Sharing major restructuring initiatives, the FBR chairman said that some of the major initiatives included centralised monitoring and supervision; crackdown on unethical practices; realignment of jurisdiction; establishment of new formations such as Large Tax Office (LTO), Multan and CTO Islamabad; crackdown against smuggling/POL stations; curbing under invoicing; initiation of high impact sectoral audits; automation of refunds through Sales Tax (FASTER+) and Income Tax (CITRO); centralised Post Refund Audit; Alternate Dispute Resolution; Chief Commissioners working as Ombudsperson to resolve taxpayers issues expeditiously and establishment of Pakistan Single Window (PSW).
The current year’s theme focused on automation; facilitation; simplification; enforcement and ease of doing business.
About the reforms, the FBR chairman stated that we have successfully restructured the tax administration without the appointment of funky consultants.
“I am facing the challenge of simulations focusing on revenue streams as well as tax administration on strategic issues,” he remarked.
Dr Ahmed stated that the FBR always take action against the foreign assets and income in cases where the FBR received information about unexplained assets and income.
He declared amnesty schemes as a major hurdle in the revenue collection system. The amnesty schemes are a hurdle in recovery of hidden assets abroad and domestic.
Dr Ashfaq said that it was not the mandate of the FBR to repatriate overseas assets of Pakistanis. The FBR can only tax the un-taxed amount of the people who have not declared their foreign assets in their returns.
Asked about the taxing of foreign assets of Pakistanis, the chairman said that in the first two years of the incumbent government Pakistan received data about the assets of Pakistanis abroad under the OECD tax convention.
However, the chairman disclosed that all those people have whitened their untaxed money through the tax amnesty scheme announced by the incumbent government. “We have to implement the order of the parliament and government as implementing body,” the chairman said.
Dr Muhammad Ashfaque stated that the government would honour its obligations in case of those who availed tax amnesty for possessing offshore assets abroad. The FBR is not in business of repatriation of money but we are supposed to tax unexplained/undeclared assets lying abroad. The government provided two tax amnesties and owners of offshore assets whitened their assets/ income by availing these schemes. We got information from OECD in bulk but if the Parliament has granted amnesty scheme, then it has become a routine issue for us, he added.
To a question the chairman FBR said that he was against the traditional reforms. He said more than 11,000 pages were inked for reforming of the FBR. However, he claimed that he will restructure the FBR headquarter and field formations.
He said he enjoy full political support and will implement the restructuring plan. The chairman said anti-smuggling drive will continue in the current fiscal year as well. As a result, he said imports of smuggle prone items on regular channel increases.
The chairman, however, claimed that refunds of exporters, as well as taxpayers, will not be withheld.
He also said that refunds of taxpayers were withheld since 2008 until 2018 to show better revenue figures. “We will resolve the pending refund issues”, he said.
He said that the FBR will introduce a single tax code for the Inland Revenue Service. Instead of three separate tax codes i.e. Income Tax Ordinance, Sales Tax Act, and Federal Excise Act, there would be a single IRS Code very soon.
The FBR chairman said that the prize scheme would be soon announced for the general public.
To another question on the issue of laxity in the implementation of benami law and money laundering the chairman said progress is made in both areas. However, he did not support his claim with sharing of any data.
About the FBR’s data hacking, Chief Information Officer Mansoor Azam Sultan informed that it was assumed that FBR data was sold on the dark web, but it never happened. There was zero evidence that the FBR data was sold. Yes there was a breach in the system, but they never got access to the FBR’s data. They were successful in making an attempt to disturb the FBR’s system, but the data was never lost. In 24 hours, all our systems were back online. The reported news about the restoration of 90 percent of the FBR system are wrong.
To a question, Chairman FBR also clarified that the resignation of chief executive officer of PRAL is not linked with the cyber attack on FBR data system.
The FBR is constantly in touch with the World Bank for procurement of systems for the FBR, Mansoor Azam Sultan added.
About the anti-smuggling measures, Member Customs Operations Syed Muhammad Tariq Huda stated that the FBR has been able to check smuggling of petroleum products to the tune of US$2 billion.
Similarly, smuggling of the mobile phones of around $2 billion has also been controlled.
The FBR has taken action against 1,600 petrol pumps selling smuggled petroleum products and this drive would continue in the future.
Member Customs Tariq Huda said that tangible progress was made in the areas of anti-smuggling measures, which yielded the desired results. He said steps were taken for controlling the currency smuggling in the country.
Copyright Business Recorder, 2021
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