Federal Board of Revenue Chairman Salman Siddiq said on Saturday the tax machinery would make all-out efforts to ensure compliance by 2.3 million undocumented persons for achieving the assigned revenue collection target of Rs 1,952 billion for 2011-12.
On the conclusion of the post-budget press conference at the Planning Commission on Saturday, he told media that the tax machinery aims at collecting Rs 50 billion through improved administration and recovery of due taxes from identified 2.3 million potential non-filers. We will also launch centralised audit of all taxes from July 1, 2011 to ensure the achievement of desired tax collection target of Rs 1,952 billion as envisaged for the next fiscal year. The analysis of the information collected from various sources would play an important role in expanding the tax net," he added.
He said the FBR generated income tax demand of Rs 3 billion by scrutinising the profile of non-filers and found that each of them was liable to pay an average amount of Rs 65,000 as tax. "We have identified around 17,000 such non-filers from Karachi out of total 2.3 million," he said and added that by using available data warehouse as the source of information the FBR was checking tax profiles with the help of Nadra to trace the tax dodgers.
He said the exercise aimed at broadening the tax base would continue as permanent feature of the Board irrespective of the fact that any specific personality continues to remain as head of this crucial organisation. During his interaction with the media, he commented that the FBR has the authority to refer major cases of tax evasion or total misdeclaration involving huge amounts to the National Accountability Bureau (NAB), if necessary.
To a question, he said the Board has the capacity to generate over Rs 70 billion from 0.7 million identified potential persons by collecting around Rs 0.1 million from each person on average basis. The FBR has huge potential to raise huge income tax demands against the potential persons operating out of the tax net.
The FBR Chairman said that the FBR will be able to collect over Rs 80 billion through revenue generation measures taken on March 15, 2011 which would continue in 2011-12. The FBR is fully determined to meet the target of Rs 1588 billion in 2010-11.
Sharing strategy for achieving the tax collection target of Rs 1,952 billion, the FBR Chairman said the tax machinery had set a target of Rs 1,588 billion for out-going fiscal year as basis for envisaging the next financial year target and by adding nominal growth including inflation target of 12 percent and GDP growth by 4.5 percent the total nominal growth of 16.5 percent would translated into generating revenue of Rs 1,848 billion.
"The carryover of abolishing of Sales Tax exemptions in accordance with March 15, 2011 decision by withdrawing SRO and slapping GST on fertilisers, pesticides and tractors and 5 percent tax on zero-rated five export oriented sectors such as textile, leather, surgical goods, sport goods and carpets that would yield Rs 81 billion in the next fiscal year," he added.
Salman Siddiq said the FBR aims at collecting Rs 50 billion through improved administrative measures while overall impact of net relief in major taxes including Income Tax, Sales Tax and Customs was estimated at Rs 27 billion so the net impact after excluding the relief measures would be net Rs 23 billion. "By adding carry over impact of abolishing of sales tax exemption in 2011-12 is amounted to Rs 81 billion and net impact of administrative measures of Rs 23 billion will fetch additional Rs 104 billion into the FBR''s kitty," he added.
He said that the FBR would achieve its set target of Rs 1,588 billion on June 30, 2011 as they had identified short filers of withholding agents involving an amount of Rs 25 billion. There are stuck-up cases involving Rs 131 billion pending before courts and the FBR was filing applications before the honourable courts to take up such cases where the tenure of stay order has already lapsed. He said that the FBR was also tracking down those who obtained illegal input adjustments and it would be recovered.
He also said the proposal to impose GST on poultry feed and cattle feed was dropped with the vision that the government did not want to impose taxes on those items that could result into increased prices of food commodities. "The government has dropped the budgetary proposals for withdrawal of exemptions on poultry feed and increase in the rate of the federal excise duty (FED) on the import of edible oils, vegetable ghee and cooking oil from Rs 1 per metric ton (PMT) to Rs 2 PMT under the government policy for not taxing the food commodities consumed by the general public," he added.