KARACHI, July 4: Secretary General Revenue Division and Chairman Federal Board of Revenue (FBR) Abdullah Yousuf said on Wednesday that revenue target of Rs1,025 billion would be met by filling tax gap of various sectors bringing their contribution in proportion with their share in the GDP.

Speaking at the 5th anniver-

sary celebration of the Large Taxpayers Unit (LTU) the FBR chief stressed upon the tax collectors to try to achieve the high revenue growth of 22.8 per cent set for the fiscal 2007-08 by filling the revenue gap of such sectors and sub-sectors whose contribution towards GDP is high but tax payment ratio is low.

Abdullah Yousuf said that the distribution of tax was lopsided and was not in line with the contribution made by different sectors of the economy to the GDP. Citing an example, he said retailers contributed up to 16 per cent towards GDP but their share in tax is only 3 per cent. Similarly, he said wholesaler’s contribution to GDP stands at 12 per cent but their share in tax collection is only 4 per cent.

This means that both these sectors jointly contribute up to 28 per cent to the economy but have little share in tax collection. He stressed upon the LTU officers to fill this gap and work hard to correct the situation.

The chairman FBR disclosed that as of today oil and gas, banking and telecommunications were the highest contributors towards revenue generation, which stood at around 50 per cent of the total revenue collection.

He further said that oil and gas sector’s share in total income tax collection stood at 26 per cent; banking sector 16 per cent and telecommunications 8 per cent. Bringing together these sectors generate revenue to a tune of Rs330 billion towards income tax.

Similarly, he said they were also the highest contributors towards sales tax with oil and gas sector 25 per cent; telecommunication 15 per cent followed by ghee, cement, sugar etc. In short oil and gas and telecommunications paid sales tax to the tune of Rs309 to 310 billion during the last fiscal.

Consequently, Mr Yousuf said that the present growth in revenue collection was predominant because of higher economic growth but there was a need to broaden the tax net to enhance tax-to-GDP ratio.

Therefore, he said revenue collectors would have to strictly follow the roadmap given by the FBR for the next 10 years in order to improve tax- to-GDP ratio from the present level of 10.5 per cent to 15 per cent so that “we could at least reach the level of regional countries.”

Undoubtedly, he said the tax collection target was achievable but it was equally important that the government must do its job by ensuring development of proper infrastructure and equally improving the social sector of the country.

Driver of the economy, he said, is private sector and the government role is only of a facilitator, therefore, there should be matching development and improvement in the infrastructure.

“Since Pakistan has been left behind in many areas, therefore, we have to work hard with commitment and dedication to cover the lost ground,” he said adding that consequently, a high growth rate for revenue collection set for fiscal 2007-08 at 22.8 per cent will have to be achieved by the tax collectors.