April 29, 2007	Sunday	Rabi-us-Sani 11, 1428

ISLAMABAD, April 28: The Central Board of Revenue (CBR) is facing a shortfall of Rs37.64 billion revenue on account of two leading federal taxes — general sales tax (GST) and customs duty during the first nine months (July-March) of the current fiscal year over the same period last year.

It is the income tax collection, which comes to the rescue of the tax machinery. It recorded a more than 59 per cent growth during the period under review.

The CBR chairman has already directed the collectors of customs and sales to recover arrears from taxpayers under the heads to meet the shortfall.

The GST remained short of target by Rs20 billion just in nine months of the current fiscal year as revenue realisation under the head reached to Rs218.8 billion as against the target of Rs238.8 billion set for the same period.

Official figures stated that the decline in the overall GST realisation was mainly due to substantial reduction in sales tax collection at import stage which stood around Rs15 billion.

However, GST collection from domestic industries and other services also witnessed more than Rs4 billion shortfall during the July-March period of the current fiscal year as against the target.

The collection of GST has registered a nominal growth of only over eight per cent in July-March this year when compared with the same period last year.

The annul target set for the GST collection stood at Rs343.8 billion. This means that for achieving the target under the head the CBR would have to do extra effort to generate Rs125 billion revenue in the next three months —April-June.

On the other hand, customs duty lagged behind the target by Rs17.64 billion in the first nine months of the current fiscal year as against the target of Rs110.3 billion set for the same period. The custom levy also witnessed a negative growth of 2.52 per cent during the period.

The customs collection target for the whole year was projected at Rs157.5 billion, which seemed very difficult to be achieved by end June 2007.

Customs officials are hoping to be around in between Rs130 to Rs140 billion by end of the current fiscal year.

Poor enforcement of sales tax regime by the CBR in the last few years has resulted in a narrow tax-base, where just 30 top taxpayers pay more than 50 per cent of the total sales tax receipts.

During the fiscal year 2006, 30 top taxpayers contributed to 50.4 per cent of the total domestic sales tax collection, reflecting a growth of 19.7 per cent as against one per cent growth of all the remaining taxpayers.

The statistics clearly indicated poor enforcement of the sales tax regime, which resulted into a massive tax-evasion by medium and small taxpayers as sales tax department is yet to devise a plan to plug loopholes in the existing system. In its efforts to widen the sales tax net in the country, the CBR is focusing on raising the number of registered sales taxpayers.