ISLAMABAD, Aug 5: To discourage unnecessary imports, the government has appointed a high-level committee to examine and identify various imported items to be taxed, says a senior government official.

“We need to reduce non-essential imports for which a committee having secretaries of finance, commerce, industries and production and food and agriculture is examining various proposals to deal with the issue of unnecessary imports,” Federal Bureau of Revenue (FBR) Chairman Ahmad Waqar told Dawn on Tuesday.

He said the committee had been appointed in the light of the new trade policy to address the issue of rising imports due to which Pakistan’s import bill had risen many-fold.

He, however, said that while luxury goods are likely to be further taxed, the import of essential items, like palm oil, wheat, pluses, etc., would continue under normal taxation currently being followed by the FBR.

“But why should we import items like milk, cheese, butter, margarines, etc.”, the FBR chairman asked, adding that the objective should be to restrict the declining foreign exchange reserves by discouraging unnecessary imports.

Responding to a question, the FBR chairman said that there was no plan to revise downward tax collection target of Rs1.25 trillion during the current financial year.

He said although collection of over 20 per cent increased taxes was a challenging target, it would be achieved by improving the system further.

He said tax-to-GDP ratio was being increased by bringing more tax-payers in the formal tax net.

He was of the view that the existing number of about 2.2 million tax-payers should be increased through expansion of income tax and sales tax regime.

These two taxes would be the future taxes and have a good scope to help provide adequate revenue to the government, he added.

The FBR chairman said that revenue collection target set for July had acceded to Rs66 billion against the target of Rs64.4 billion.

Likewise, he said that the FBR collected Rs50 billion in June which was quite satisfactory.

“Therefore I am sure we will achieve our annual collection target”, he added.

This target would be achieved by minimising leakages and without harassing taxpayers, he added.

Responding to a question, he said ever since he took over he was concentrating on removing corruption from the organisation.

He said there would be more emphasis on less and less contact between tax-payers and the tax collectors. Also, the system, he pointed out, will be fully automated.

Mr Waqar said that there was a huge potential to enhance the country’s revenue which needed to be explored.

“There are some grey areas, like corruption and the weak taxation system, and once they are fully taken care of, the government will start receiving additional revenues.”

The best way to remove corrupt practices was to reduce human contact between tax payers and the tax department as done in developed and many developing countries.

He said being the chairman he would ensure further removal of discretionary powers of tax officials which “I am sure will help receive more and more revenues.”

In reply to a question, he said he would like the FBR employees to have adequate pay structure so that they would refrain from indulging in corrupt practices.