Federal Board of Revenue (FBR) is planning to introduce reward-system for tax collectors to achieve the revenue target of Rs 1380 billion, which is over 19 percent as compared to last fiscal year. This was stated by Sohail Ahmed, chairman, FBR along with Israr Rauf, member tax policy and Tanveer Khwaja, collector, sales tax and federal excise (enforcement) collectorate during his brief visit to Recorder House here on Saturday.
He said the modalities in this regard are going to be defined, according to which, board would offer certain percentage of the revenue collection as cash reward to the successful tax collectors but if they failed to achieve targets, administrative action would be taken against them. He further said that this sort of initiative would encourage other taxmen to show their best, which would create a competitive environment in the tax department.
Talking to senior journalists, Sohail Ahmed said that the board is pondering to enforce the tax rules strictly to bridge the revenue collection gap, which presently stood at around Rs 700 billion.
To a question, he admitted that the revenue collection would be short of the target in the first quarter of the current fiscal year. But it would be offset in coming quarters through collection of advance tax, he maintained.
He said that 90 percent of restaurants are involved in violating the sales tax laws, providing severe shocks to the national kitty hence the stiff monitoring is on the cards to plug the revenue leakages.
"Some bigwigs in the board had misled the representatives of International Monetary Fund (IMF) about the revenue collection. Therefore, the current revenue target, which was earlier at Rs 1350 billion, had been increased to Rs 1380 billion. However, the IMF have subsequently accepted that the figure is exaggerated by some Rs 20 billion".
To another question, the chairman FBR said that quick justice is a big challenge for our judiciary and added the decisions of Alternative Dispute Resolution Committee (ADRC), which is considered to be the major arbitrator in taxation mechanism, is an important avenue.
He said that FBR has proposed to collect 16 percent GST from sugar millers at new ex-mill rate but the government has reduced GST by 8 percent at old ex-mill rate, which would create negative impact of Rs 4 billion on national exchequer.
"The department has no authority to impose its decision, but the elected politicians and cabinet have the final authority to approve any recommendation," he said.
Responding to a query, Sohail said that the board would soon take some corrective measures to improve the performance of Pakistan Revenue Automation Limited (PRAL), which is presently not up to the mark.
When asked about the circular issued pertaining to the bad debts of the banks, Israr explained that it was a clarification of a previous order issued after consultation with the banks which defined that if the calculated bad debts exceeded 1% of the loan portfolio the banks have to pay tax on the excess amount.