ISLAMABAD, Oct 30: The government is considering further revising the tax collection target of Rs443.7 billion projected for the current financial year, 2001-02.

In the prevailing situation it would not be possible for the CBR to meet the target of Rs443.7 billion for the current fiscal, which was made on the basis of Rs393.7 billion revenue collection last year, CBR chairman Riaz Ahmed Malik told Dawn here on Tuesday.

“However, I still hope, that if the situation returns to normal in next couple of months, the CBR would be able to touch the figures of around Rs430 billion. In case the situation deteriorates beyond the present assessment then the target may be reduced further. In this case we can lose more revenue in swelling import bill”, he said.

Justifying the downward revision, Mr Malik said “we have lost around Rs4 billion in just 20 days in September with another shortfall of Rs5 in October is also ahead of us”. “And if the situation remains the same then there is every likelihood that yet another shortfall of Rs4 billion for November could be expected, however, our present assessment is that the situation will be normalized by December”, he hoped.

When asked about economic fallout of the post-September 11 events on country’s revenue collection, the CBR chairman said one major impact of the current situation had so far been observed in the shape of enormously declined customs clearance as compared to the pre-September 11 period. The reduction is almost one third. Similarly, sales tax and withholding tax, which are also collected at the import stage, have also been hit, he added.

To a question whether the upward trend of the rupee against the dollar will affect the imports and exports negatively, Mr Malik said, yes, in face of rupee’s gaining against dollar, “we do expect revenue collection loss from import receipts”. Supposing there is an increase of Rs2 per dollar in the current year as compared to the average rate of last year, total impact on revenue decline would be 3 per cent. The revenue loss for the year will be around Rs2 to 3 billion, he said.

Answering another question, Riaz Ahmed said since “we do not have any such mechanism to control the emerging situation and its impact on our economy, we will carry out analysis on day to day and week to week basis to check the running impact of the ongoing situation on the revenue collection”.

Explaining the main purpose of the re-structuring of tax administration, the CBR chairman said the proposed tax administration reforms would be the single most important step in present circumstances.

“I would certainly opt to facilitate the full automation of the tax machinery to minimize the unfair interaction between the taxpayers with the tax officials, simplifying procedures, adopting universal self-assessment scheme, change the rules and to reduce discretionary powers of the taxmen and for inter tax co-ordinations”, he added.

He was of the opinion that while inadequate salary is a factor leading to corruption, but it is not the only one. Personal conviction and motivation play a very strong role in determining attitudes towards honesty. Moreover, a significant salary increase only for one segment of public servants will create its own implications elsewhere. Another factor is that the government is raising the salaries of all public servants across-the-board from December onwards. Thus, while staying within the overall government salary structure, the CBR would strive to enhance the quantum of rewards and honoraria for its employees if they perform according to laid down criteria, he said.

When asked about the implementation of the re-structuring plan, Mr Malik said “we are working in consultation with the relevant stakeholders and hopefully we would come out with an agreed plan based on the recommendations of the Shahid Hussain led Task Force along with the IMF recommendations, which would be implemented across the country within a period of two to three years.

To a question that the new system would be workable in the country, he said he thought if a system was pragmatically evolved it would certainly work in the long run. As far as the re- structuring is concerned, nothing is new, “we are not going to impose any unusual obligations on the taxpayers but just proposing to improve our own efficiency, working procedure and environment”.

Answering another question, he said that some among those who used to the earlier system might resist the new system to some extent. There may be some institutional reluctance for maintaining their status quo, but this would be at a very low level, he added.