ISLAMABAD, June 11: Central Board of Revenue (CBR) Chairman Abdullah Yousuf on Monday conceded that the tax machinery was encountering enforcement problems in sales tax and customs duty but hoped that the aggressive revenue target of Rs1,025 billion for the fiscal year 2007-08 would be achieved.
“We have to improve our efficiency to generate tax from the potential taxpayers. The enforcement issues can not be resolved within days. We are trying to improve upon,” he said while replying a question at the post-budget press conference.
Addressing the newsmen the CBR chairman said the aggressive revenue target was achievable due to well-organised reforms, new taxation measures taken in the budget and continuity in the economic growth during the current fiscal year.
To a question he said that the shortfall recorded in the customs duty and sales tax collections, which stood over Rs60 billion during the current fiscal, was bridged by the robust growth of over 50 per cent in the income tax collection.
However, he said that the tax collection target of Rs835 billion set for the outgoing fiscal year would be achieved easily by the end of this month.
He defended the decision of one per cent surcharge on imports on the pretext that it would not only generate revenue for the government but would also help in reducing the flow of imports in the country to reduce the trade deficit.
To a question he said the surcharge will also be applicable on all imports, including those coming under free trade agreements or preferential trade agreements. He clarified that it was not in violation of any provision of the WTO agreement.
Mr Yousuf said that the CNG sector was not contributing the GST according to the actual value-addition, which stood at around 300 per cent. He said that under the new arrangement this gap has been narrowed down. However, he ruled out any increase in retail price due to this arrangement.
He said the budgetary measures taken by the government would help enhance the tax-to-GDP ratio besides broadening the tax base and improving the documentation of the economy. He said the budgetary measures relating to sales tax and federal excise were aimed at providing relief to the taxpayers by rationalising tax rates thereby creating a conducive and business-friendly environment.
