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Overdrive mode: Tax revenues


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AFTER all the talk of out-of-the-box thinking, it looks like we’re back to the oldest gimmicks in the book. Everything the Federal Board of Revenue is doing these days is a reflection of how it has always behaved — except that in an interim government without a full-time finance minister, there’s much more room for discretionary authority to be exercised. We’ve seen the revenue target revised downward this fiscal year, as in previous years. Yet the FBR is still left with an upward climb of almost a trillion rupees in the final quarter of the current fiscal year. Delays in the appointment of a full-time federal finance minister are not helping since the interim prime minister is reportedly wary of taking any far-reaching decisions, like approving an amnesty scheme. Standing alone at the foot of this mountain, the FBR chairman appears to be acting vigorously to wring every additional drop of revenue out of the system, while pushing hard to expand the scope of his discretionary powers by trying to get a reluctant interim prime minister to approve the tax amnesty scheme.

All indications tell us this will end the exact same way it always does. Every final quarter of the fiscal year turns into a Herculean effort to meet an unrealisable target, and always the revenue target is revised around this point in time. Then come the shakedowns. This time they’ve netted the textile sector, with all its clout neutralised at the exit of the elected government. Now they’re brandishing their audit powers towards another set of companies. Additionally, they’ve hiked the sales tax on imported tea, which was brought down to 5pc in order to curb smuggling through the Afghan Transit Trade channel, and upped it to 16pc. After a year of talk about databases, and netting 3.5 million new taxpayers and the ironic wonders of amnesty schemes, clearly we’re back to the oldest playbook in the business all over again: shake down those who are already in the net.

Comments (3) Closed

Syed Ahmed Apr 08, 2013 01:40pm
No more screwing the people who are already in the Tax-net. The Tax-net must be broadened to include all the politicians, all Landlords and Agriculturists, Doctors, Lawyers. Also the Tax should be based on standard of living of an individual that can be gauged from the house the individual lives in and the type and number cars he uses.
TheFartman (@abduinmarkets) Apr 08, 2013 03:10pm
The sooner I leave this country, the better!
Tariq Malik Apr 08, 2013 11:03pm
the whole essence of a state is law and order surly then the law has to be applied in full force .it is in the best interest of the whole country that all the people are within its law regardless of income. ample allowance can be allowed for the poor but not to tax evaders who are ruining the nations future