ISLAMABAD: The Federal Board of Revenue (FBR) here on Wednesday chalked out and approved a contingency plan and roadmap for the recovery of Rs 69 billion to meet the tax collection target of Rs 1.604 trillion.While chairing the ‘Chief Commissioners, Commissioners Conference of Inland Revenue Service’ at the Planning Commission, Federal Minister for Finance Hafeez Shaikh categorically warned the tax officials either to quit the department or perform as per target assigned to them for realisation of taxes. The country needs revenues to meet national obligations and we need officials in the tax machinery who can face the challenge and perform accordingly, the minister added.At the conclusion of the conference, FBR Chairman Salman Siddique informed the media that actual tax collection target was fixed at Rs 1.667 trillion. However, due to different issues including floods and reduced growth forecast and economic slowdown the tax collection target was reduced to Rs 1.604 trillion for 2010-11.Till date, the FBR has collected Rs 837 billion taxes and a revenue shortfall of Rs 32 billion is being faced in first eight months (July-February) period of the ongoing fiscal year 2010-11, he explained.He explained that out of a total of Rs 130 billion of stuck-up arrears, the FBR has estimated to collect Rs 10 billion. The recovering inadmissible amount of sales tax identified by the IT system would be Rs 50.5 billion. This includes inadmissible input tax adjustment of sales tax of Rs 24 billion and supplies made by black-listed companies is of Rs 16.5 billion. During the current year, we expect from audit Rs 6-8 billion. It has been estimated to collect Rs 392 million from stock exchanges.He said that FBR was supposed to collect Rs 73 billion additional revenue through conversion of general sales tax (GST) into value-added tax (VAT) and due to political opposition of VAT in the country, FBR is unable to generate it. A roadmap or a contingency plan has been approved in the conference to bridge this shortfall especially in the area if income tax and sales tax, he added.
Explaining the roadmap, the FBR chairman informed that some 1,000 non-filers of sales tax returns’ companies have been identified and tax offices have been given a deadline to issue them notices by March 15 and recover sales tax from them by May 15. Similarly, 1,000 short filers’ companies of sales tax have also been identified and tax officials have also been given a deadline to issue them notices by March 15 and recover due sales tax from them by May 15.The FBR chairman disclosed that sales tax officials have allowed Rs 50.5 billion inadmissible input adjustment to the sales tax registered persons and refund against supplies made by black-listed sales tax registered persons. This has been done against the law and FBR would initiate action against such sales tax registered persons and would recover the amount from them by May 15, 2011.
In the area of income tax, the FBR chairman informed that some 100,000 corporate entities are not filing their mandatory corporate tax return and we have selected some 50,000 corporate companies for enforcement of their returns and collection of due corporate tax by May 15.The FBR chairman informed that at present some Rs 130 billion tax arrears are to be realised and FBR intends to recover at least some Rs 10 billion by May 15 through decisions on the cases from relevant courts.The FBR chairman said that withholding tax collection audit of the banks, airlines and motor vehicles registering departments of the provinces have been ordered and handsome amount of withholding tax of Rs 6 billion to Rs 8 billion is expected to be realised under this exercise.He said that FBR would approach Economic Coordin-ation Committee of the Cabinet in it’s next meeting for withdrawal of partial exemption of GST on sugar and would recommend standard rate of 17 percent GST against the existing 8.0 percent on sugar so as to recover due tax – Dailytimes