ISLAMABAD: Ministry of Finance dropped several tax proposals recommended by the Federal Board of Revenue (FBR) while directing the apex trade body to focus on simplification of tax laws, procedures and removing anomalies in the budget for the next fiscal year, Dawn has learnt from knowledgeable sources.
The FBR had proposed taxing few sectors to raise revenue in order to achieve the collection target of Rs5.1 trillion for the next year — up 30 per cent from the proposed collection target in the last fiscal year.
A senior FBR tax official told Dawn on Thursday that the Finance Division has rejected the proposals to tax a few sectors on the plea that the upcoming budget will be a ‘corona-budget’.
“We have identified several sectors for taxing to raise revenue for achieving the target”, the official said.
Govt wants no new taxes in upcoming budget
However, he said that the finance ministry dropped the idea on the plea that people are not ready to accept new tax measures amid the coronavirus outbreak. “Government believes in focusing on facilitating taxpayers by easing procedures.”
On the issue of next year’s revenue target, the official said that it has yet to finalise the Rs5.1tr target proposed by the International Monetary Fund (IMF).
“We will hold meetings with IMF officials next week to lower the revenue target”, he added.
For 2019-20, the IMF has already lowered the FBR’s tax target to Rs3.9tr, from Rs4.8tr to mitigate the impact of pandemic on businesses.
However, achieving this benchmark also depends on the continuation of economic activity during the month of June, the official added.
According to another tax official, the budget for the next fiscal year would not include new taxes. The anomalies have also been identified for redressal in the next budget, he added.
The budget-makers are also considering proposals including tax incentives for some sectors to help revive businesses affected by the coronavirus.
Published in Dawn, May 29th, 2020