The Chairman of Federal Board of Revenue (FBR), Tariq Bajwa, has said the FBR is expecting to collect Rs 2270 billion to Rs 2275 billion by the end of current fiscal year. He informed the Senate Standing Committee on Finance here on Tuesday that the FBR is facing difficulty in meeting its revenue collection target during the last quarter (April-June) of 2013-14 mainly due to that has been adversely rupee appreciation affecting imports.
The FBR has collected Rs 1575 billion as provisional collection during the first nine months of 2013-14, showing a growth of 16.4% over the corresponding period of last year. All the taxes have exhibited a double-digit growth except customs duties that show a slight decline. The main reason behind the decrease is low growth in dutiable imports which is the tax base of customs duty. When the committee members asked him to disclose the revenue collection target projected for 2014-15, he said that he was not in a position to disclose the target for the next fiscal year.
He said that the FBR's annual revenue target for 2013-14 has been fixed at Rs 2,345 billion which requires a growth of 20.5% over the actual tax receipts of Rs 1946.4 billion during 2012-13. Keeping in view the satisfactory performance shown during first 9 months of current year, it is expected that the assigned target of Rs 2,345 billion is likely to be achieved by the end of 2013-14.
When asked about the amount to be collected from the auction for 3G and 4G, Bajwa said that 10 percent adjustable withholding tax is applicable at the time of auction. It is expected that an amount of Rs 8 to 10 billion would be colleted on account of 10 percent withholding tax. The total customs duty collected during (July-March) of current fiscal year is Rs 169 billion as against last year's collection of Rs 164 billion of the same period. He said the growth in tax revenue compared to last year's is attributable to factors such as disclosure of revenue collected as a result of increased tax rate as well as increase in withholding tax rate.
The FBR has collected an amount of Rs 1,402 billion as Inland Taxes up to March, 2014 against the collection of Rs 1,180 billion during the corresponding period of last year with a growth of 19 percent which includes revenue received from new budgetary measures as well as from the measures where tax rates have been increased. Collection from the budgetary measures up to February, 2014 has revealed that sales tax and increase in rate of withholding taxes have resulted in collection of Rs 78.092 billion. A break-up shows that the increase in rate of withholding taxes generated Rs 38.920 billion and sales tax collection stood at Rs 39.172 billion. Apart from this, some new budgetary measures have also been introduced. The collection up to February, 2014 shows that the budgetary measures of income tax generated Rs 2,123 million and FED Rs 2,283 million, ie, a total of Rs 4.4 billion.
Altogether a collection of Rs 82.5 billion has been made on account of budgetary measures up to February, 2014, Bajwa said. The increase in collection of Customs duties is 2.73 percent from Rs 169 billion in July-March, 2014, over 164 billion collected last year. No new tax measures were introduced in Customs duties during the last year budget. FBR Chairman said the tax-GDP ratio during 2012-13 was 8.5 percent while projected tax-GDP ratio for 2013-14 is around 9 percent.
He added that the Government of Pakistan has reached understanding with the IMF that the reforms related to taxation will be undertaken by FBR during 2013-14. Insofar as broadening of income tax base is concerned FBR has devised a strategy. Initially, the objective is to incorporate 300,000 new taxpayers. A total of 100,000 notices will be issued by June 30, 2014. FBR has issued around 82,000 notices by end March, 2014. It is hoped that the target will be achieved. A comprehensive Administration Plan has been devised by FBR along with cut-off dates set for implementation of various activities, he concluded.