ISLAMABAD: Federal Board of Revenue (FBR) Chairman Amjed Zubair Tiwana Saturday said the blocking of mobile phone SIMs and disconnection of utility connections of non-filers would start in January 2024.
Sounding resolute at the FBR Headquarters, the FBR chairman told BR that the enforcement exercise would be implemented within January 2024.
The last date to respond to the notices was December 28-29, 2023.
Subsequently, the FBR will issue a general order containing names of the non-compliant non-filers, whose electricity and gas connections would be disconnected. It is a legal requirement to issue names after the issuance of notices to the non-filers. After this, the process of disconnection of electricity/gas connections and blockage of SIMs would be started.
The FBR will face the challenge of taking action against non-filers having electricity bills. There are cases where a person is a non-filer or a tax defaulter, but the electricity connection is in the name of his father or any other family member. Tax machinery would work hard to disconnect the electricity connection of a person who is actually a non-filer.
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Tax authorities are confident to add 1.5 million new filers into the tax net under the ongoing exercise of broadening the tax base.
The FBR chairman said that the major obstacle in the performance of the FBR is the limited resources. The FBR’s revenue collection would further increase following availability of ample resources with the FBR.
So far, the FBR has collected Rs4,456 billion during July-December (2023-24) against the target of Rs4,425 billion, reflecting an increase of Rs31 billion. The FBR is confident to reach the figure of Rs4,475 billion during the period under review, Tiwana said.
The FBR chairman said that the momentum of revenue collection would increase in the second half (January-June) of 2023-24. During last fiscal year, the FBR collected 45 per cent of the total collection during first half of 2022-23.
The FBR is confident to cross the figure of Rs975 billion during the month of December 2023. Target of December was Rs967 billion. The FBR will achieve both the targets for the month of December as well as July-December of 2023-24.
This shows a comfortable position that the FBR has collected 47.5 per cent of the total revenue during the first six months (July-December) 2023-24. Thus, nearly 52 per cent revenue would be collected in the last two quarters of 2023-24.
Despite achievement of the target, the most important aspect of collection in December 2023 is that the share of withholding taxes has been reduced up to 50 per cent in the overall direct taxes collection. A number of withholding taxes has also been abolished during the last 1-2 years.
On the other hand, there is a significant increase in tax collection from FBR’s own efforts from advance taxes and assessments during the first six months of 2023-24.
The ratio of imports and domestic taxes revealed that nearly 40 per cent taxes are coming from imports, whereas, 60 per cent from domestic stage, he maintained.
The FBR chairman stated that the facilitation to the taxpayers is evident from the fact that the total refunds stood at Rs230 billion during July-December (2023-24) as compared to Rs177 billion during the same period of 2022-23, reflecting an increase of Rs53 billion.
There is a major increase of 30 per cent in payment of refunds during the first half of 2023-24 as compared to the same period last fiscal year. The FBR has effectively controlled the element of mal-administration in refund payments at the lower level of verification.
“It is one of the IMF conditions to pay refunds within the specified thresholds to avoid accumulation/stocks of refunds. We have fulfilled the benchmark ceiling of refund payments as agreed with the IMF during the first six months of 2023-24”, Tiwana stated.
In December 2023, the share of direct taxes in total tax collection stood at 60 per cent, reflecting less reliance on indirect taxes. The direct taxes collection share in total tax collection is 49 per cent during the first six months (July-December) 2023-24.
At the same time, the share of withholding taxes has been reduced in the direct taxes and the share of direct taxes has been increased in the overall tax collection during the period under review.
He said that the advance tax payment has been collected on the basis of income ratio of the taxpayer. The ratio of income increases through effective audit and assessments of the latest tax year.
About the ongoing reforms in the tax administration, the FBR chairman confirmed that there is a proposal to set up a separate Customs Board from the Inland Revenue Service which is under consideration of the government.
The pilot project of the digital invoicing within the sector of fast-moving consumer goods would be launched in January 2024. All importers, manufacturers, wholesalers/ dealers/distributors and wholesaler-cum-retailers of fast-moving consumer goods would operate under FBR’s electronic sales tax (e-ST) integration system, he said.
Responding to a query, the FBR chairman said that the FBR has moved a summary to the federal cabinet for the appointment of members of the Anti-Benami Adjudicating Authority. The cabinet is expected to consider the summary in the next meeting.
Copyright Business Recorder, 2023
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