Finance Ministry has decided to extend chargeability of 0.4% withholding tax on banking transactions of non-filers till December 31, 2017 and directed Federal Board of Revenue (FBR) to achieve an ambitious revenue collection target of Rs 4,013 billion in the current fiscal year. The decision to this effect was taken here on Thursday during a meeting at Finance Ministry.
The meeting chaired by Finance Minister Ishaq Dar reviewed the progress of revenue collection, return filing, and campaign of awareness undertaken by Federal Board of Revenue (FBR) in this regard. An official said that the meeting emphasized on the need for increase in revenue collection to achieve the ambitious target set for the FBR.
The chairman FBR briefed the finance minister on revenue collection in the month of September 2017 as well as for the first quarter of the current fiscal year (July-September 2017-18).
He stated that FBR is on-course to achieve the tax revenue target for fiscal year 2018. The chairman FBR stated that the number of returns received up to 28th September 2017 has increased to 178,945 compared with 54,086 returns received till the same date in September 2016.
Sources said that the FBR would be required to collect Rs 650 billion additional revenue to achieve target of Rs 4,013 billion in the current fiscal year. Around 19 percent growth would be required in the current fiscal year over provisional collection of Rs 3362.1 billion in the last fiscal year.
So far, the FBR has provisionally collected over and above Rs 448 billion during first two months (July-August) of 2017-18 against Rs 371 billion in same period of 2016-17, reflecting an increase of Rs 77 billion. The revenue collection in August 2017 stood at Rs 237 billion and collection in July 2017 was Rs 211 billion. Overall, the FBR has crossed Rs 448 billion during the first two months (July-August) of 2017-18.
The revenue target of Rs 4,013 billion for fiscal year 2017-18 is based on the premise of 22.4 percent growth in customs, 22.4 percent in federal excise duties, 18.6 percent indirect taxes and 18.5 percent in sales tax. Moreover, Rs 1594.9 billion collection would be required in direct taxes against the provisional collection of Rs 1344.5 billion for the last fiscal year, followed by Rs 1579.2 billion in sale tax as opposed to Rs 1332.3 billion for the last fiscal year.
The government has estimated Rs 231.5 billion in federal excise duty (FED) and Rs 607.4 billion in customs for the current fiscal year against Rs 189.2 billion in FED and Rs 496.1 billion in customs respectively for the last fiscal year to achieve 19 percent increase.
During the meeting, it was decided that the period of applicability of reduced rate of 0.4% withholding tax on banking transactions for non-filers shall be extended from 30th September 2017 to 31st December 2017. The finance minister directed FBR to complete the due process in this regard.