Management Association of Pakistan (MAP), keeping up with its tradition of offering value to its membership, held a 'Discussion Forum for the Federal and Provincial Budgets 2014-15' recently at Movenpick hotel Karachi. Amir Jamil Abbasi, Partner KPMG & Hon. Treasurer Management Association of Pakistan, gave the welcoming address.
In his presentation he focused on the reasons for the low tax performance; some of the reasons he mentioned were, low compliance, narrow tax base, low tax to GDP ratio, faulty tax policy and need to avoid tax amnesty schemes. Shahid Husain Asad, Member Tax Policy, Federal Board of Revenue, during his address answered the questions and the issues that were raised during the different presentations and the panel discussion.
He gave a brief summary of how FBR is working towards making certain that visible changes can be seen in terms of an increase in the tax collection by reinforcing its collection mechanism, which eventually will lead to lower tax rates overall. He also mentioned that FBR has launched an aggressive drive for broadening tax base and in this connection NTNs were issued to 3.5 million tax payers out of which only 10 percent have returned as tax filers. This is not enough to mobilise revenue; however, he expressed FBR's resolve to continue efforts in this direction.
He said that in the upcoming budget filing of tax return will be made compulsory; those who do not comply will be required to pay double the normal amount of tax. He also informed the audience that FBR was open to receiving proposals for the budget, and that FBR intends to look into each proposal in detail to try and understand the issues being faced by the people in general.
Tashfeen K. Niaz Chairman Sindh Revenue Board, said that "SRB Revenue Collection Budget increased by 31.25 percent in 2013-2014, against an increase of 28 percent for 2012-2013, which shows an increase in confidence of the Sindh Government in SRB's ability to accept challenges." He further added that, "SRB is the only tax authority in Pakistan which exceeded its budgetary tax collection target by Rs 2 billion (6.25pc) year-on-year increase of 36 percent in collection.
SRB is gearing up to a challenge of collecting Rs 100 billion by the year 2017-18, the target is ambitious and there are challenges but the target was well thought of and achievable". He mentioned that, undocumented transactions, continuing operational ambiguities, and limited access to information from PRAL (FBR) are some of the challenges being faced by SRB.
Syed Shabbar Zaidi, Partner A.F. Ferguson & Co, Past President ICAP, Former Minister of Finance for Sindh 2013, in his presentation said that "Last six months' strategies and projected actions reflect that no policy change and administrative action is in front on the matter of filling the gap in fiscal deficit. Following matters are still outside the orbit of interest of the policy on tax matter: Agricultural income, Agricultural trading, Retailers and wholesalers, Real Estate, Exporters' income tax".
Some of the suggestions that he put forward for the Budget 2014-15 are as follows; 'Target for revenue collection to be around Rs 3750 billion without any new taxes. The government should make a firm decision for a five-year budget rather than having an annual budget, adequate program for energy conservation; use of natural light, interest rate management - need for lowering interest rate to promote growth, revamping of indirect tax structure, new social order with empowered and financially viable local governments which is possible only with devolution of taxation system."-PR