LAHORE, May 27: The government is mulling not to impose any new tax on the masses in the upcoming budget, rather it has done all homework to reform taxation as well as tax collection mechanism in the country in order to meet its revenue shortfall.

An official of the Finance Ministry said here on Tuesday the Federal Board of Revenue was facing a shortfall of Rs35 billion in various heads in the current financial year, which could be rectified only through reforming the tax collection system.

He said continuous raise in fuel prices in the international market had caused an abnormal hike in government’s expenditure. As a way out, the government, however, instead of imposing any new tax on masses, would remove the bottlenecks in the way of ensuring fair tax collection system.

The official said the cigarettes industry alone had been inflicting more or less Rs7 billion revenue loss to the exchequer every year in terms of cigarettes smuggling, tax evasion and counterfeiting.

The government also decided to launch a major crackdown on tax defaulters and in this regard it made committees at various levels that would collect tax evasion data in different sectors.

“After analysing the data, committees would devise a strategy to control tax evasion, the official added.

In the past, the government had, for combating the tax evasion in the cigarette industry, planned to take a number of initiatives including installation of close circuit cameras, factories record audit, maintaining record of tobacco purchase activities and fixing cigarettes minimum price. However, due to lack of effective implementation no substantial progress had come out of these steps, the official said.