ISLAMABAD, July 14: The Chairman Central Board of Revenue (CBR) M. Abdullah Yousuf on Thursday admitted that sales tax collection in 2004-05 could not realize to its potential. “The chairman said that although we have achieved the sales tax collection target, set for the year 2004-05, but still our collection does not match with the potential that exists in our major sales tax generating sectors’, the chairman remarked.

He was addressing the joint session of the Conference of Collectors of Sales Tax and Federal Excise and Collectors of Adjudications and Appeals, here on Thursday.

Elaborating further, the chairman particularly referred to the revenue collected from POL products, telecommunications, electric energy, natural gas, cotton yarn, cement, services, etc., during the year 2004-05. The sales tax collected from these sectors did not commensurate with the growth in production of these manufacturing items, he added.

“We have to check that where the fault lies,” he said and added, “we must plug all the loopholes to minimize the leakages.” As far as sales tax is concerned, the chairman said, we are dealing with major industries and as the growth in the manufacturing sector was over 15 per cent last year, our tax collection should have been in that vicinity.

“But, there is a huge gap and we have to bridge it to make our monitoring and tax collection system efficient and viable,” he said. The sales tax collectors must have knowledge of the total production, clearance, supplies in respect to the industries under their jurisdiction areas to effectively check their tax payment behaviour.

“You cannot confront with potential taxpayers or tax evaders unless you have solid information/data about their business concerns,” the Chairman felt.

Mr Yusuf said that sales tax collection in current financial year would have to play a vital role to meet the overall revenue collection target of Rs690 billion and it was, therefore, imperative to evolve and implement a comprehensive strategy to meet this challenging task.

During the conference, a number of important issues came under discussion and necessary decisions were taken. These included identification of potential taxpayers in collaboration with respective trade bodies and income tax authorities, establishment of ‘dedicated cell’ for pursuing the potential taxpayers to join the tax net and facilitate them in getting registration and nomination of focal person in each Collectorate for coordination with Income Tax Department, CBR and trade bodies.

It was decided to establish a dedicated cell in each collectorate to monitor the progress in the carry forward scheme. The cell will also monitor and ensure security of the stocks.