Miftah briefed about the steps taken by FBR to broaden tax base

ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday informed Finance Minister Miftah Ismail that the board has taken major measures to broaden the tax base, ensure effective use of non-filers profiles of Nadra, increase the number of retailers under the Point of Sale (POS) system, and improve customs operations under new initiatives.

Sources told Business Recorder on Wednesday, that the finance minister along with Minister of State for Finance Dr Aisha Ghaus Pasha visited the FBR House and held a meeting with the FBR chairman and senior FBR members.

The meeting was attended by FBR Chairman Asim Ahmad and members of the board.

The chairman Nadra along with his team briefed the finance minister on the taxpayers’ profiles for expanding the tax net and registration of non-filers.

It has been decided that Nadra would further improve the data and communicate to the FBR for the purpose of broadening the tax base.

The FBR also informed the finance minister that the Customs Department has decided to ink an agreement with a leading shipping line to have accurate data of imports and exports to check misdeclarations. Through this joint venture, the FBR would be able to check frauds of misdeclarations by cross-matching the shipping lines data with the importers declarations in Pakistan.

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The FBR informed that the FBR’s POS System to document the retail sector has integrated over 10,611 POS machines of 6,000 Tier-1 retailers across the country. A total of 425 million tax invoices were generated by Tier-1 retailers integrated with the POS. A total number of six POS computerized draws have been held in which prize money worth Rs318 million was disbursed among 6,042 lucky winners. The number of the FBR invoices is increasing as a result of effective monitoring by the FBR, despite a resource crunch.

The target for 2022-23 is to increase the number of integrated retailers from 6,000 to 18,000. There is a 25-30 percent increase in sales tax from integrated retailers during 2022-23 as compared to the previous fiscal year.

The FBR high-ups shared the plan for achievement of the revised revenue collection target of Rs7.440 trillion for 2022-23.

Tax officials further informed that the achievement of revenue collection target for 2022-23 would largely depend on the performance of the economy and the effective enforcement by the FBR.

The FBR officials also discussed the revenue impact of the major taxation measures taken for 2022-23.

Tax authorities shared measures to expand the tax net including measures to increase the number of big retailers under the POS system.

The FBR has fully documented the Large Scale Manufacturing(LSM) across the country through Track and Trace System (TTS) which has already started paying dividends. Sales tax collection from the sugar sector during the current crushing season (December 2021– March 2022) under Track and Trade System amounted to Rs26.03 billion as compared to the corresponding period of the previous crushing season which stood at Rs19.9 billion, showing an increase of 31 per cent in four months only. Similarly, sugar production during the current crushing season was recorded at 7.85 million tons as compared to 5.67 million tons of the previous crushing season depicting a 39.7 per cent increase over the last year. The tobacco and fertilizer sectors will also be brought under the TTS during the first quarter of the financial year 2022-23.

Through the Finance Act 2022, the fixed tax regime for the retailers has been rationalized and now instead of percentage of the amount of monthly electricity bill, tax shall be charged on their monthly electricity bills as; Rs3,000 for monthly bill up to Rs30,000, Rs5,000 if the monthly bill exceeds Rs30,000 but does not exceed Rs50,000 and Rs10,000 for monthly bill over Rs50,000. This shall constitute full and final discharge of tax liability of such persons under both Income Tax Ordinance, 2001, and the Sales Tax Act.

Copyright Business Recorder, 2022