ISLAMABAD, May 16: CBR chairman M Abdullah Yousuf said on Wednesday that the Central Board of Revenue can help collect agriculture income tax whose collection is so far very poor and constitutes a negligible part of the overall collection.
“Though the levy of income tax on agriculture income is a provincial subject, if provinces sought any help from the CBR, the tax officials will be asked to collect the levy for the provinces besides their existing responsibilities,” said the chairman in response to a question at the conclusion of a pre-budget seminar, organised by the ACCA Pakistan.
Talking to reporters, the chairman said the share of agriculture in the total economy is more than 22 per cent, but its share in the national kitty is minimal as currently only Rs2 billion were collected from the sector.
Mr Yousuf said it is the responsibility of the provincial governments to change the existing law for better coverage and compliance of the levy on agriculture income.
Answering a question, the chairman said the upcoming budget of 2007-08 will focus on creating a conducive environment for attracting investment besides doing away with various anomalies causing delay in the promotion and establishment of businesses. The chairman said the revenue base will be enhanced by plugging loopholes in the sales tax and income tax.
He said that the previous government failed to remove those anomalies which resulted in a narrow tax to GDP ratio.
Mr Yousuf said that tax-to-GDP ratio would be enhanced to 15.5 per cent in the next 10 years from the existing 10.5 per cent.
Asked how the tax-to-GDP ratio would be enhanced, the chairman replied that the tax base would be expanded, which according to him was growing at an annul rate of 20 per cent for the last three years.
To a question, the chairman said that the audit parameters have been finalised. The external audit has been initiated at large taxpayers units (LTUs) as a pilot project.
Following the success story, the same would be extended to all regional tax offices in a bid to avoid harassment of taxpayers, he added.
The chairman said that the share of income tax collection in the total revenue has reached 42 per cent in the first 10 months of the current fiscal year as against 32 per cent during the same period of last year.
Mr Yousuf said that the litigation pendency had been reduced to a great level. More than 80,000 appeals have been disposed of during the last two years.
The chairman was optimistic that the reforms in the tax administration would be completed by end of December 2009.
Earlier, Mohammad Ashraf, in his presentation, pointed out lacunas in the income tax law and rules and recommended a range of measures for consideration in the up-coming budget.
He proposed collection of information on the total tax contribution, better interaction between tax officials and tax collectors and simplification of the income tax law.
In his presentation, Fawad ul Hassan Zubari, on improving sales tax compliance, proposed to the government quick processing of data, information visibility, quicker reform initiative, considered rulings for problem facing taxpayers, education and informative material for legal and procedural requirements.
