The members of the National Assembly''s Standing Committee on Finance has shown concern over shortfall in revenue collection and asked the tax authorities to focus on the direct tax policy instead of indirect taxes. The meeting of the finance committee chaired by Faiz Ullah took briefing on working and functions of Federal Board of Revenue.
In response to the members'' concern, Chairman Federal Board of Revenue (FBR) Muhammad Jahzeb Khan informed the finance committee that there is an overall increase of 32 percent in filing of income tax returns during the first seven months of the current fiscal year as opposed to the same period of previous fiscal.
A total of 359,694 individuals filed their tax returns during the period under review and 10,366 Association of Persons (AOPs) filed their returns during the first seven months of 2018-19. This reflects an increase of 22 percent over the same period a year before. A total of 7,467 companies filed their tax returns with an increase of 34 percent in the current fiscal year as opposed to the same period of the last fiscal year.
The meeting was also told about Rs 170 billion revenue shortfall during July-January 2018-19 and plan of action to increase the revenue. The meeting was told that ;(i) notices have been issued to 6,500 tax evaders and defaulters and recovery proceedings from them are under way; (ii) mapping of 2000 plazas in Karachi, Lahore and Islamabad has been completed and; (iii) banks account information of over 150,000 accounts owned by Pakistanis aboard under the OECD arrangement has been sought in the same period.
The chairman also acknowledged lack of transparency in tax collection machinery and stated that the government has introduced a number of reforms within the tax machinery to deal with the issue and established a monitoring unit for addressing the issue of alleged corruption in tax machinery. The meeting was further told that in consultation with the World Bank, the FBR is in a process of transformation in the tax administration through reforms.
The committee was also told that smuggling of mobile phone has been reduced considerably subsequent to the measures taken by the government while work on valuation of imports is under way to stop under-invoicing.
He said that tax return form is being simplified for the ease of the people and 2,500 retail stores have been converted to IT system, and big shopping malls and chain stores would also be included in this system. He said that they are making arrangements to bring housing societies into tax net. The committee was also informed that outstanding sales tax refunds stand at Rs 160 billion. About the annual budget allocation of FBR, the committee was told that FBR''s annual budget is Rs 25 billion and 78 percent of the allocated budget is utilised on account of payment of salaries.
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